Madhya Pradesh High Court
Bansal Extraction And Exports Pvt. Ltd. vs M.P. State Agriculture Marketing Board on 30 July, 2024
Author: Gurpal Singh Ahluwalia
Bench: Gurpal Singh Ahluwalia
1 W.P.No.8512/2016
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE GURPAL SINGH AHLUWALIA
ON THE 30th OF JULY, 2024
WRIT PETITION No. 8512 of 2016
BANSAL EXTRACTION AND EXPORTS PVT. LTD.
Versus
M.P. STATE AGRICULTURE MARKETING BOARD AND OTHERS
Appearance:
Shri Mukesh Agrawal - Advocate for petitioner.
Shri Samdarshi Tiwari - Senior Advocate with Shri Palash Upadhyay -
Advocate for petitioner.
Reserved on : 24.07.2024
Pronounced on : 30.07.2024
ORDER
This petition under Article 226 of Constitution of India has been filed seeking the following relief(s):-
"(i) The Hon'ble High Court may kindly be pleased to issue an appropriate writ, order or direction to call for the entire records from respondents for its perusal.
(ii) The Hon'ble High Court may kindly be pleased to issue an appropriate writ, order or direction to quash the order dated 28.04.2016 (Annexure-P/1) passed by respondent No.1 affirming order dated 15.01.2015 (Annexure P/11) and 26.02.2015 (Annexure P/12) in the interest of justice.2 W.P.No.8512/2016
(iii) The Hon'ble High Court may kindly be pleased to issue an appropriate writ, order or direction to quash the order dated 15.01.2015 (Annexure P/11) and 26.02.2015 (Annexure P/12) issued by the respondent No. 3 in the interest of justice.
(iv) The Hon'ble High Court may kindly be pleased to issue an appropriate writ, order or direction to declare that the respondents are not empower to impose 5 times of market fee under section-19 of the Adhiniyam in the event of payment of market fee already paid in one market area on the petitioner in the event of 5 days delay deposited 27 anughya patra before the respondent No. 3 under the Adhiniyam.
(v) Any other appropriate writ, direction or order against the respondents be issued in favour of the petitioners with cost of the petition."
2. It is the case of the petitioner that petitioner is a private limited company having its registered office at 3rd Floor, Tawa Complex, Bittan Market, E-5, Arera Colony, Bhopal and Anil Kumar and Sunil Kumar are the Directors of petitioner's company. A unit was installed and made operational by petitioner at Mandideep for extraction of oil from Soyabean, therefore for the purpose of trading and processing, the petitioner obtained two license from the Krishi Upaj Mandi, Obedullaganj, District Raisen and accordingly, the petitioner company started processing of Soyabean sometime in the year, 2010.
3. It is submitted that as per Section 19 of Krishi Upaj Mandi Adhiniyam, 1972, the Market Committee is empowered to levy market fee. No Market Committee other than the one in whose market area the notified 3 W.P.No.8512/2016 agriculture produce is brought for sale or processing by agriculturist or trader, as the case may be. Thus, it is the case of the petitioner that the trader is liable to pay market fee only once and after the said transaction, if any further transaction takes place within the State, no further liability can be fastened on the trader to pay the market fee by any of the Market Committee in the State.
4. Section 19 of the Krishi Upaj Mandi Adhiniyam further provides that if any agricultural produce is brought in the market area for commercial transaction or for processing, the market fee shall be deposited by the buyer or processor as the case may be, in the Market Committee within the period of 14 days and if the buyer or processor had not submitted the permit issued Sub-Section 6, then penalty to the tune of 5 times of the actual payable amount could be imposed.
5. It is submitted by the counsel for the petitioner that the entire market fee was paid by the petitioner for the transactions which took place in the market area of the respondent No.3. Whatsoever, Soyabean was purchased by the petitioner from the area falling within the territorial jurisdiction of other Market Committees, the petitioner was liable to pay market fee to the said Market Committees and after bringing the same within the territorial jurisdiction of the respondent No.3, the petitioner was under obligation to submit the permits within the period of 14 days.
6. It is the case of the petitioner that the employee of the petitioner, who was responsible for submitting the permits within the period of 14 days, fell ill and accordingly 27 permits could not be submitted before the respondent No.3 within the period of 14 days. Thereafter, the respondent 4 W.P.No.8512/2016 No.3 issued a notice to the petitioner directing the petitioner to make payment of market fee amounting to Rs.17,93,935/-. On receiving the said notice, the petitioner made a request to respondent No.3 by its letter dated 24.12.2013 thereby demanding certain details and also submitted an explanation that due to illness of employee, 27 permits could not be deposited within a period of 14 days but the same have now been deposited with delay. Upon receiving the explanation/application dated 24.12.2013 made by the petitioner, the Market Committee treated the said application as an appeal and dealt with the same without giving any opportunity of hearing and held that instead of proposed amount of Rs.17,93,935/-, the petitioner is liable to deposit an amount of Rs.5,31,004.76/- The copy of the said decision was never provided to the petitioner nor it was communicated to the petitioner and accordingly the respondent No.3 started demanding the amount of Rs.5,31,004.76/-, during the period of certain correspondence, which took place between the petitioner and the respondent No.3. However, the license issued by respondent No.3 in favour of the petitioner had expired and, therefore, the petitioner filed an application for renewal of his license. However, to surprise of the petitioner, the respondent No.3 communicated to the petitioner that it has received an information from the respondent No.1 that some Scrutiny Committee has been constituted by Regional Director Bhopal, which has found that in fact, 135 permits were not submitted within the prescribed period of 14 days, therefore, the license cannot be renewed. Immediately, thereafter the petitioner by his letter dated 22.10.2024, disputed the figure of non-deposit of 135 permits within the period of 14 days. However, the 5 W.P.No.8512/2016 respondent No.3 renewed the license of the petitioner for further period of 5 years.
7. It is the case of the petitioner that under Section 59 of Krishi Upaj Mandi Adhiniyam, the Managing Director is the competent authority to examine the proceedings of any Market Committee on his own motion or on an application made to him, therefore, other the Managing Director, no other subordinate authority of respondent No.1 is competent to examine the resolution of respondent No.3 but in the present case the Deputy Director of the Region has quashed the proceedings dated 03.09.2014, which was undertaken by the respondent No.3 and without giving a proper opportunity of hearing to the petitioner, passed order dated 24.12.2024. Thereafter, by the impugned order dated 15.01.2015, the petitioner has been directed to deposit an amount of Rs.65,14,950/- on the ground of non- deposit of 135 permits within the stipulated period of 14 days.
8. The petitioner preferred an appeal under Section of 59 of Krishi Upaj Mandi Adhiniyam, 1972 against the order dated 15.01.2015 and also prayed for ad-interim relief and ad-interim relief was granted by the respondent No.1. Thereafter, by the impugned order dated 26.02.2015, the Secretary of Krishi Upaj Mandi Samiti, Obedullaganj has held that the petitioner has not deposited an outstanding amount of Rs.65,13,950/- as a result, the license which was renewed has automatically stood cancelled. Accordingly, it was directed that the petitioner should deposit the outstanding amount of Rs.65,13,950/- within the period of 15 days; failing which the same shall be recovered by way of land revenue.
6 W.P.No.8512/20169. It is submitted that although the appeal against the imposition of penalty of Rs.65,14,950/- was pending and, there was an interim order but still the impugned order dated 26.02.2015 was passed by Secretary, Krishi Upaj Mandi Samiti, Obedullganj, therefore the petitioner preferred an appeal under Section 34 of Krishi Upaj Mandhi Adhiniyam thereby challenging the order dated 26.02.2015 also. The respondent No.1 heard both the appeals i.e. filed under Section 59 of Krishi Upaj Mandi Adhiniyam against the order dated 15.01.2015 and appeal under Section 34 of Krishi Upaj Mandi Adhiniyam against the order dated 26.02.2015 and by the impugned order dated 28.04.2016, the Additional Director Krishi Upaj Mandi Board, Bhopal dismissed both the appeals passed in case Board/Law/16/59/2015.
10. Challenging the orders passed by the respondent No.2 as well as the orders passed by Secretary Krishi Upaj Mandi Samiti, Obedullganj, it is submitted by counsel for petitioner that once it was found that only 27 permits were not deposited by the petitioner within the period of 14 days as per the provisions of the Krishi Upaj Mandi Adhiniyam, then there was no reason for the respondent to reopen the case by enhancing the number of permits from 27 to 135. Even otherwise, it is submitted that the Deputy Director, Madhya Pradesh Rajya Krishi Upaj Mandi Board had no authority to constitute a committee to verify number of permits, which were not deposited by the petitioner within a stipulated period and no opportunity of hearing was given before enhancing number of permits from 27 to 135.
11. It is further submitted that with great difficulty the petitioner has deposited the amount of Rs.5,31,004.76/- which has resulted in financial 7 W.P.No.8512/2016 crunch for the petitioner and now the demand of total amount of Rs.65,13,950/- is illegal and may result in closing down the industry.
12. Per contra, the petition is vehemently opposed by the counsel for respondents. By referring to Clause-14 of Bye-laws framed by Madhya Pradesh Rajya Krishi Viparan Board, it is submitted that the proceedings of the minutes of the Samiti shall be forwarded to the office of Regional Joint Director/Deputy Director and in those resolutions, in which the Secretary had marked his objections shall be implemented only after the decision is taken by the Regional Joint Director or Deputy Director. The Regional Joint Director/Deputy Director can stay the execution of the resolutions passed by the Secretary but prior thereto the Secretary shall be heard. Further, the decisions can be set aside also.
13. It is submitted that in exercise of power under Clause-14(2) of Bye- laws, the Deputy Director had found the resolution passed by Samiti thereby holding that only 27 permits were submitted belatedly was incorrect. He got the same re-verified and it was found that in fact 135 permits were not deposited by the petitioner in time. Even, it is clear from the minutes of the proceedings of the Krishi Upaj Mandi Samiti, Obedullganj, dated 18.09.2014, the Mandi Inspector had submitted its report that an amount of Rs.65,13,950/- is recoverable from the petitioner, which was primarily based on non-submission of 135 permits but Krishi Upaj Mandi Samiti, Obedullganj in an illegal manner reduced the 135 permits to 27 and held that only an amount of Rs.5,31,004.76/- is recoverable under Section 19(2) of Krishi Upaj Mandi Adhiniyam.
8 W.P.No.8512/201614. So far as the non grant of opportunity to defend is concerned, it is submitted that the law relating to natural justice has undergone a drastic change and unless and until the petitioner prima facie makes out a case that a prejudice was cause to the petitioner on account of non-grant of an opportunity, the order cannot be quashed. The petitioner has not filed any document to show that except 27 permits all other permits were submitted within the period of 14 days.
15. Heard the learned counsel for the parties.
16. The controversy involved in the present case revolves in a very narrow compass.
17. Section 19 of Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 reads as under:-
"19. Power to levy market fee.- [(1) Every Market Committee shall levy market fee-
(i) on the sale of notified agricultural produce whether brought from within the State or from outside the State into the market area; and
(ii) on the notified agricultural produce whether brought from within the State or from outside the State into the market areas and used for [processing or manufacturingl;
at such rates as may be fixed by the State Government from time to time subject to a minimum rate of fifty paise and a maximum of two rupees for every one hundred rupees of the price in the manner prescribed:
Provided that no Market Committee other than the one in whose market area the notified agricultural produce is brought for sale or "[processing or manufacturing] by an 9 W.P.No.8512/2016 agriculturist or trader, as the case may be, for the first time shall levy such market fee].
(2) The market fees shall be payable by the buyer of the notified agricultural produce and shall not be deducted from the price payable to the seller:
[Provided that where the buyer of a notified agricultural produce cannot be identified, all the fees shall be payable by the person who may have sold or brought the produce for sale in the market area:
Provided further that in case of commercial transaction between traders in the market area, the market fees shall be collected and paid by the seller]:
[Provided further also that no fees shall be levied upto 31st March, 1990 on such agricultural produce as may be specified by the State Government by notification in this behalf if such produce has been sold outside the market yard or sub-market yard by an agriculturist to a co- operative society of which he is a member.] [Provided also that for the Agricultural Produce brought in the market area for commercial transaction or (for processing or for manufacturing) the market fee shall be deposited by the buyer or [processor or manufacturer), as the case may be, in the market committee office within [fourteen) days if the buyer or processor has not submitted the permit issued under sub-section (6) of Section 19]"
[(3) The market fees referred to in sub-section (1) shall not be levied on any notified agricultural produce-
(i) in more than one market area, in the State; or
(ii) more than once in the same market area, if it is resold, -
(a) in the case of (i) in the market other than the one in which it was brought for sale or bought or 10 W.P.No.8512/2016 sold by an agriculturist or trader, as the case may be, for the first time and has suffered fee therein; or
(b) in the case of (ii), in the same market area, in the course of commercial transactions between the traders or to consumers [subject to furnishing of information in such form as may be prescribed in the bye-laws by the person concerned to the effect] that the notified agricultural produce being so resold has already suffered fee in the other market area of the State.] [(4) If any notified agricultural produce is found to have been [processed, manufactured), resold or sold out of yard without payment of market fee payable on such produce the market fee shall be levied and recovered on five times the market value of the [processed or manufactured) produce or value of the agricultural produce as the case may be].
(5) The market functionaries, as the Market Committee may by bye- laws specify, shall maintain account relating to sale and purchase or (processing or manufacturing) in such forms and submit to the Market Committee such periodical returns as may be prescribed.
[(6) No notified agricultural produce shall be removed out of the marker yard, market proper or the market area as the case may be, except in accordance with a permit issued by the market committee, in such form and in such manner as may be prescribed by the Bye-laws:
Provided that if any removes or transports the [processed or manufactured] product of notified agricultural produce form the market yard, market proper or the market area, as the case may be, such person shall carry with him the bill or cash memoran- dum issued under Section 43 of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995)].11 W.P.No.8512/2016
(7) The Market Committee may levy and collect entrance fee on vehicles, plying on hire, which may enter into market yard at such rate as may be specified in the bye-laws."
18. Sub-Section 6 of Section 19 of the Act, 1972 provides that No notified agricultural produce shall be removed out of the market yard, market proper or the market area as the case may be, except in accordance with a permit issued by the Market Committee. Third proviso to Section 19 (2) of the Adhiniyam, 1972 provides that where an agricultural produce is brought in the market area for commercial transaction or for processing, the market fee shall be deposited by the buyer or processor as the case may be, in the Market Committee office within 14 days, if the buyer or processor has not submitted the permit issued under Sub-Section (6) of Section 19.
19. Thus, it is clear that if a trader has purchased the agricultural produce from some other place falling within the market area of some other Market Committee, then he has to obtain a permit from the Market Committee from where the trader has purchased agricultural produce and has to submit before the Market Committee in whose jurisdiction agricultural produce was brought.
20. Section 19(4) of the Adhiniyam, 1972 provides that if any notified agricultural produce is found to have been processed, re-sold or sold out without payment of market fee payable on such produce, the market fee shall be levied and recovered on five times the market value of the processed produce or value of the agricultural produce as the case may be.
12 W.P.No.8512/201621. Furthermore, as per Clause-20(6) of the Bye-laws, the trader who has purchased the agriculture produce from the market area of any other Market Committee has to deposit the permit within the period of 14 days from the date of import and in case of violation of the same not only he will be required to pay market fee but he would be also liable to pay interest @ 24% per annum
22. The first question, which requires consideration is as to whether the Deputy Director had any authority to modify or cancel the resolution passed by the Krishi Upaj Mandi Samiti or not ?
23. Clause-14 of Bye-laws reads as under:-
"¼14½ ikfjr çLrkoksa dk fØ;kUo;u %& ¼1½ lfefr }kjk fy;s x;s fu.kZ;ksa dk fØ;kUo;u rRdky çkjaHk fd;k tk,xk rFkkfi eaMh lfefr ds çR;sd çLrko ij vf/kfu;e] fu;e] mifof/k vFkok çca/k lapkyd ds funsZ'k dk mYys[k fd;k tk;sxkA lfefr ;fn mldh 'kfä ls ijs dksbZ fu.kZ; ysrh gS rc lfpo ml ij viuk vfHker vafdr djsxkA ¼2½ lfefr dh cSBd dh dk;Zokgh dk fooj.k 7 fnu ds Hkhrj {ksf=; dk;kZy; ds la;qä lapkyd@milapkyd dks çsf"kr fd;k tk;sxkA ,sls çLrko ftlesa lfpo }kjk viuh vkifÙk ntZ dh xbZ gS ml Bgjko dk fØ;kUo;u vkapfyd la;qä lapkyd@mi lapkyd ds vuqeksnu ds i'pkr~ gh fd;k tk;sxkA vkapfyd la;qä lapkyd@mi lapkyd }kjk fof/k fo#) fy;s x;s lfefr ds fdlh fu.kZ; dk fØ;kUo;u la;qä lapkyd@milapkyd }kjk LFkfxr fd;k tk;sxk] fdUrq blds iwoZ lfpo dks lquk tk;sxkA lfpo dks lquus ds ckn la;qä lapkyd/milapkyd dks vf/kdkj gksxk fd og fof/k fo#) ik;s x;s fdlh Hkh çLrko dks jnn~ dj nsaA ¼la'kks/ku 15-03-2019½"
24. Thus, it is clear that the Samiti is required to forward the copy of the minutes of the Committee within the period of 7 days to the office of 13 W.P.No.8512/2016 Regional Director/Deputy Director and not only the Joint Director which/Deputy Director will have an authority to suspend the execution of the resolution but they also have the competence to set-aside the resolution if it is found to be contrary to law.
25. Thus, the contention of the petitioner that only Managing Director could have to dealt with the resolution passed by the Krishi Upaj Mandi, Obedullganj is misconceived and it is held the Regional Deputy Director had an authority to suspend and set aside the resolution dated 18.09.2014 passed by Krishi Upaj Mandi Samiti, Obedullganj, District Raisen, by which it was held that the petitioner is liable to deposit an amount of Rs.5,31,004.76/- on account of non-deposit of 27 permits within a period of 14 days. It appears that thereafter an in house enquiry was conducted and the enquiry report has been filed by the respondent as Annexure R/1. In paragraph-2 of the said enquiry report, it is specifically mentioned that a report was received to the effect that total 135 permits were deposited belatedly and accordingly the petitioner was given an opportunity to explain by a show cause notice dated 26.12.2013 and by its letter dated 24.12.2013, petitioner accepted the belated deposit of 135 permits.
26. It was also found that in spite of the fact that 135 permits were deposited by the petitioner belatedly but still the Krishi Upaj Mandi Samiti, Obedullganj, came to a conclusion that only 27 permits were deposited belatedly. Even, the statements of the witnesses were recorded during the enquiry and it was found that all 135 permits were received belatedly on 29.11.2012.
14 W.P.No.8512/201627. It is further submitted that earlier the demand of penalty of Rs.17,93,935/- raised by the Secretary, Krishi Upaj Mandi was not in accordance with law and it appears that the Secretary, Krishi Upaj Mandi Samiti namely Shri Vinay Prakash Pateriya and Shri Sanjay Raj Vaidya, Assistant Deputy Inspector were responsible for the same. The petitioner itself had admitted that 135 permits were deposited belatedly and accordingly it was found that in fact the petitioner is liable to pay an amount of Rs.65,13,950/- along with penalty.
28. The contention of the counsel for petitioner that before coming to such a conclusion, the enquiry committee did not give any opportunity of hearing to the petitioner as well as Appellate Authority also did not give an opportunity to the petitioner is concerned the same is misconceived.
29. Before considering the submissions of counsel for petitioner with regard to non-extension of any opportunity of hearing, this Court would like to consider the law governing the field of principle of natural justice.
30. Non-grant of an opportunity by itself would not vitiate the order because unless and until a prejudice is pointed by the petitioner, an order cannot be quashed merely on the ground of violation of principle of natural justice.
31. The Supreme Court in the case of Nirma Industries Limited and another Vs. Securities and Exchange Board of India reported in (2013) 8 SCC 20 has held as under:
30. In B. Karunakar [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] , having defined the meaning of "civil consequences", this Court reiterated the principle that the 15 W.P.No.8512/2016 Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished to the employee. It is only if the Court or Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment. In other words, the Court reiterated that the person challenging the order on the basis that it is causing civil consequences would have to prove the prejudice that has been caused by the non- grant of opportunity of hearing............
35. Mr Venugopal has further pointed out that apart from the appellants, even the merchant bankers did not make a request for a personal hearing. He submitted that grant of an opportunity for a personal hearing cannot be insisted upon in all circumstances. In support of this submission, he relied on the judgment of this Court in Union of India v. Jesus Sales Corpn. [(1996) 4 SCC 69] The submission cannot be brushed aside in view of the observations made by this Court in the aforesaid judgment, which are as under: (SCC pp. 74-75, para 5) "5. The High Court has primarily considered the question as to whether denying an opportunity to the appellant to be heard before his prayer to dispense with the deposit of the penalty is rejected, violates and contravenes the principles of natural justice. In that connection, several judgments of this Court have been referred to. It need not be pointed out that under different situations and conditions the requirement of compliance with the principle of natural justice vary. The courts cannot insist that under all circumstances and under different statutory provisions personal hearings have to be afforded to the persons concerned. If this principle of 16 W.P.No.8512/2016 affording personal hearing is extended whenever statutory authorities are vested with the power to exercise discretion in connection with statutory appeals, it shall lead to chaotic conditions. Many statutory appeals and applications are disposed of by the competent authorities who have been vested with powers to dispose of the same. Such authorities which shall be deemed to be quasi-
judicial authorities are expected to apply their judicial mind over the grievances made by the appellants or applicants concerned, but it cannot be held that before dismissing such appeals or applications in all events the quasi-judicial authorities must hear the appellants or the applicants, as the case may be. When principles of natural justice require an opportunity to be heard before an adverse order is passed on any appeal or application, it does not in all circumstances mean a personal hearing. The requirement is complied with by affording an opportunity to the person concerned to present his case before such quasi- judicial authority who is expected to apply his judicial mind to the issues involved. Of course, if in his own discretion if he requires the appellant or the applicant to be heard because of special facts and circumstances of the case, then certainly it is always open to such authority to decide the appeal or the application only after affording a personal hearing. But any order passed after taking into consideration the points raised in the appeal or the application shall not be held to be invalid merely on the ground that no personal hearing had been afforded."
The Supreme Court in the case of Chairman, State Bank of India and another Vs. M.J. James reported in (2022) 2 SCC 301 has held as under:-
17 W.P.No.8512/201631. In State of U.P. v. Sudhir Kumar Singh [State of U.P. v. Sudhir Kumar Singh, (2021) 19 SCC 706 : 2020 SCC OnLine SC 847] referring to the aforesaid cases and several other decisions of this Court, the law was crystallised as under : (SCC para 42) "42. An analysis of the aforesaid judgments thus reveals:
42.1. Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.
42.2. Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. 42.3. No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice.
42.4. In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This 18 W.P.No.8512/2016 conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person.
42.5. The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-observance of natural justice."
The Supreme Court in the case of Dharampal Satyapal Limited Vs. Deputy Commissioner of Central Excise, Gauhati and others reported in (2015) 8 SCC 519 has held as under:-
20. Natural justice is an expression of English Common Law. Natural justice is not a single theory--it is a family of views. In one sense administering justice itself is treated as natural virtue and, therefore, a part of natural justice. It is also called "naturalist" approach to the phrase "natural justice" and is related to "moral naturalism". Moral naturalism captures the essence of commonsense morality--that good and evil, right and wrong, are the real features of the natural world that human reason can comprehend.
In this sense, it may comprehend virtue ethics and virtue jurisprudence in relation to justice as all these are attributes of natural justice. We are not addressing ourselves with this connotation of natural justice here.
21. In Common Law, the concept and doctrine of natural justice, particularly which is made applicable in the decision-making by judicial and quasi-judicial bodies, has assumed a different connotation. It is developed with this fundamental in mind that those whose duty is to decide, must 19 W.P.No.8512/2016 act judicially. They must deal with the question referred both without bias and they must give (sic an opportunity) to each of the parties to adequately present the case made. It is perceived that the practice of aforesaid attributes in mind only would lead to doing justice. Since these attributes are treated as natural or fundamental, it is known as "natural justice". The principles of natural justice developed over a period of time and which is still in vogue and valid even today are: (i) rule against bias i.e. nemo debet esse judex in propria sua causa; and (ii) opportunity of being heard to the party concerned i.e. audi alteram partem. These are known as principles of natural justice. To these principles a third principle is added, which is of recent origin. It is the duty to give reasons in support of decision, namely, passing of a "reasoned order".
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38. But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straitjacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances. For example, the courts have held that it would be sufficient to allow a person to make a representation and oral hearing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only full-fledged oral hearing but even cross-
examination of witnesses is treated as a necessary concomitant of the principles of natural justice.
20 W.P.No.8512/2016Likewise, in service matters relating to major punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post- decisional hearing is held to be permissible. Further, the courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on.
40. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the courts. Even if it is found by the court that there is a violation of principles of natural justice, the courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non- grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of natural justice may not lead to the conclusion that the order passed is always null and void. The validity of the order has to be decided on the touchstone of "prejudice". The ultimate test is always the same viz. the test of prejudice or the test of fair hearing.
41. In ECIL [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] , the majority opinion, penned down by Sawant, J., while summing up the discussion and answering the various questions posed, had to say as under qua the prejudice principle: (SCC pp. 756-58, para 30) 21 W.P.No.8512/2016 "30. Hence the incidental questions raised above may be answered as follows:
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(v) The next question to be answered is what is the effect on the order of punishment when the report of the enquiry officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non- furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him.
Hence to direct reinstatement of the employee with back wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions.
Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an 22 W.P.No.8512/2016 'unnatural expansion of natural justice' which in itself is antithetical to justice."
44. At the same time, it cannot be denied that as far as courts are concerned, they are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. This was so clarified in ECIL [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] itself in the following words: (SCC p. 758, para 31) "31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the courts and tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the court/tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the court/tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the court/tribunal should not interfere with the order of punishment. The court/tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the courts/tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the 23 W.P.No.8512/2016 principles of natural justice nor a denial of the reasonable opportunity. It is only if the court/tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment."
The Supreme Court in the case of Canara Bank and others v. Debasis Das and others reported in (2003) 4 SCC 557 has held as under:-
22. What is known as "useless formality theory" has received consideration of this Court in M.C. Mehta v. Union of India [(1999) 6 SCC 237] . It was observed as under: (SCC pp. 245-47, paras 22-23) "22. Before we go into the final aspects of this contention, we would like to state that cases relating to breach of natural justice do also occur where all facts are not admitted or are not all beyond dispute. In the context of those cases there is a considerable case-law and literature as to whether relief can be refused even if the court thinks that the case of the applicant is not one of 'real substance' or that there is no substantial possibility of his success or that the result will not be different, even if natural justice is followed see Malloch v.
Aberdeen Corpn. [(1971) 2 All ER 1278 :
(1971) 1 WLR 1578 (HL)] (per Lord Reid and Lord Wilberforce), Glynn v. Keele University [(1971) 2 All ER 89 : (1971) 1 WLR 487] , Cinnamond v. British Airports Authority [(1980) 2 All ER 368 :
(1980) 1 WLR 582 (CA)] and other cases where such a view has been held. The latest addition to this 24 W.P.No.8512/2016 view is R. v. Ealing Magistrates' Court, ex p Fannaran [(1996) 8 Admn LR 351] (Admn LR at p. 358) [see de Smith, Suppl. p. 89 (1998)] where Straughton, L.J. held that there must be 'demonstrable beyond doubt' that the result would have been different. Lord Woolf in Lloyd v. McMahon [(1987) 1 All ER 1118 : 1987 AC 625 : (1987) 2 WLR 821 (CA)] has also not disfavoured refusal of discretion in certain cases of breach of natural justice. The New Zealand Court in McCarthy v. Grant [1959 NZLR 1014] however goes halfway when it says that (as in the case of bias), it is sufficient for the applicant to show that there is 'real likelihood -- not certainty --
of prejudice'. On the other hand, Garner's Administrative Law (8th Edn., 1996, pp. 271-
72) says that slight proof that the result would have been different is sufficient. On the other side of the argument, we have apart from Ridge v. Baldwin [1964 AC 40 : (1963) 2 All ER 66 : (1963) 2 WLR 935 (HL)] , Megarry, J.
in John v. Rees [(1969) 2 All ER 274 : 1970 Ch 345 : (1969) 2 WLR 1294] stating that there are always 'open and shut cases' and no absolute rule of proof of prejudice can be laid down. Merits are not for the court but for the authority to consider. Ackner, J. has said that the 'useless formality theory' is a dangerous one and, however inconvenient, natural justice must be followed. His Lordship observed that 'convenience and justice are often not on speaking terms'. More recently, Lord Bingham has deprecated the 'useless formality theory' in R. v. Chief Constable of the Thames Valley Police Forces, ex p Cotton [1990 IRLR 344] by giving six reasons. (See also his article 'Should Public Law Remedies be Discretionary?' 1991 PL, p. 64.) A detailed 25 W.P.No.8512/2016 and emphatic criticism of the 'useless formality theory' has been made much earlier in 'Natural Justice, Substance or Shadow' by Prof. D.H. Clark of Canada (see 1975 PL, pp.
27-63) contending that Malloch [(1971) 2 All ER 1278 : (1971) 1 WLR 1578 (HL)] and Glynn [(1971) 2 All ER 89 : (1971) 1 WLR 487] were wrongly decided. Foulkes (Administrative Law, 8th Edn., 1996, p. 323), Craig (Administrative Law, 3rd Edn., p. 596) and others say that the court cannot prejudge what is to be decided by the decision-making authority. de Smith (5th Edn., 1994, paras 10.031 to 10.036) says courts have not yet committed themselves to any one view though discretion is always with the court. Wade (Administrative Law, 5th Edn., 1994, pp. 526-
30) says that while futile writs may not be issued, a distinction has to be made according to the nature of the decision. Thus, in relation to cases other than those relating to admitted or indisputable facts, there is a considerable divergence of opinion whether the applicant can be compelled to prove that the outcome will be in his favour or he has to prove a case of substance or if he can prove a 'real likelihood' of success or if he is entitled to relief even if there is some remote chance of success. We may, however, point out that even in cases where the facts are not all admitted or beyond dispute, there is a considerable unanimity that the courts can, in exercise of their 'discretion', refuse certiorari, prohibition, mandamus or injunction even though natural justice is not followed. We may also state that there is yet another line of cases as in State Bank of Patiala v. S.K. Sharma [(1996) 3 SCC 364 : 1996 SCC (L&S) 717] , Rajendra Singh v. State of M.P. [(1996) 5 SCC 460] that 26 W.P.No.8512/2016 even in relation to statutory provisions requiring notice, a distinction is to be made between cases where the provision is intended for individual benefit and where a provision is intended to protect public interest. In the former case, it can be waived while in the case of the latter, it cannot be waived.
23. We do not propose to express any opinion on the correctness or otherwise of the 'useless formality' theory and leave the matter for decision in an appropriate case, inasmuch as in the case before us, 'admitted and indisputable' facts show that grant of a writ will be in vain as pointed out by Chinnappa Reddy, J."
23. As was observed by this Court we need not go into "useless formality theory" in detail; in view of the fact that no prejudice has been shown. As is rightly pointed out by learned counsel for the appellants, unless failure of justice is occasioned or that it would not be in public interest to dismiss a petition on the fact situation of a case, this Court may refuse to exercise the said jurisdiction (see Gadde Venkateswara Rao v. Govt. of A.P. [AIR 1966 SC 828] ). It is to be noted that legal formulations cannot be divorced from the fact situation of the case. Personal hearing was granted by the Appellate Authority, though not statutorily prescribed. In a given case post-decisional hearing can obliterate the procedural deficiency of a pre- decisional hearing. (See Charan Lal Sahu v. Union of India [(1990) 1 SCC 613 : AIR 1990 SC 1480] .)
32. Thus, it is clear that any order cannot be quashed merely on the ground that opportunity of hearing was not given unless and until any prejudice is caused to the aggrieved person.
27 W.P.No.8512/201633. Now, the only question for consideration is as to whether the petitioner has pointed out any prejudice in the matter or not.
34. The respondents had filed its return on 12.02.2023 and even after an expiry of more than one year and five months, the petitioner has not filed his rejoinder thereby controverting the observations made by the enquiry committee that the petitioner had admitted that it had not deposited the requisite 135 of permits within the stipulated period.
35. Furthermore, the petitioner has not given the details of the permits submitted by it on 29.11.2012 because as per the enquiry report all the 135 permits were deposited by the petitioner on 29.11.2012, which was beyond the stipulated period of 14 days.
36. Thus, neither the petitioner has tried to clarify the factual aspect nor has tried to rebut the averments made by the respondents in their return as well as in the enquiry report, which has been filed as Annexure R/1. In the enquiry report, it is specifically mentioned by the enquiry officer that petitioner had admitted the non submission of the 135 permits within the stipulated period.
37. Before parting with this order, this Court would like to clarify that by the interim order dated 11.05.2016, the further proceedings of recovery against the petitioner was stayed till the next date of hearing subject to the petitioner depositing a sum of Rs.5 Lakhs.
38. Now, the only question for consideration is as to whether the petitioner is under obligation to pay the interest from the date of interim order till the actual payment is made.
28 W.P.No.8512/201639. The Supreme Court in the case of Style (Dress Land) v. UT, Chandigarh, reported in (1999) 7 SCC 89 has held as under:-
"15. Regarding awarding of the interest by the High Court for the period of stay it is argued that as in Sahib Singh case no such direction was issued, the appellants could not be burdened with the liability of paying the interest and that at the rate of 18% per annum it was excessive and exorbitant. It is a settled principle of law that as and when a party applies and obtains a stay from the court of law, it is always at the risk and responsibility of the party applying. Mere passing of an order of stay cannot be presumed to be the conferment of any additional right upon the litigating party. This Court in Shree Chamundi Mopeds Ltd. v. Church of South India Trust Assn. [(1992) 3 SCC 1] held that the said portion of order by the Court means only that such order would not be operative from the date of its passing. The order would not mean that the order stayed had been wiped out from existence. The order of stay granted pending disposal of a case comes to an end with the dismissal of a substantive proceeding and it is the duty of the court in such cases to put the parties in the same position they would have been but for the interim orders of the court. Again in Kanoria Chemicals and Industries Ltd. v. U.P. SEB [(1997) 5 SCC 772] the Court held that the grant of stay had not the effect of relieving the litigants of their obligation to pay late payment with interest on the amount withheld by them when the writ petition was dismissed ultimately. Holding otherwise would be against public policy and the interests of justice. In Kashyap Zip Industries v. Union of India [1993 Supp (3) SCC 493 :
(1993) 64 ELT 161] interest was awarded to the Revenue for the duration of stay under the Court's order, since the petitioners therein were found to have the benefit of keeping back the payment of duty under orders of the Court.29 W.P.No.8512/2016
16. The High Court was, therefore, not wrong in directing the payment of interest on the amount of arrears of rent for the period when the stay order was obtained till the period the writ petitions were dismissed. We, however, feel that awarding of interest @ 18% per annum from the aforesaid period was on the excessive side. The respondent authority could not be equated with private commercial institutions and conferred with an amount of compensation in the form of interest which, in the judicial parlance, may amount to penalty, despite the fact that the persons found to have jeopardised the process of law were rightly held liable to compensate the respondent authority by way of interest. In our opinion 15% per annum interest for the aforesaid period would have been just and proper. We, however, agree with the findings of the High Court that the respondents are free to charge appropriate interest on the amount of arrears of rent between 1-3-1992 to the date when the stay orders were passed by the High Court. We are sure that in determining such rate of interest the respondent authority would act fairly and justly."
40. Thus, it is clear that by obtaining stay on the execution of impugned order, the petitioner has utilized the amount and thus it is also liable to pay interest as per the provisions of Section 19-B of Krishi Upaj Mandi Adhiniyam, which reads as under:-
"[19-B. Default in payment of market fee.-(1) Any person liable to pay market fee under this Act shall pay the same to the market committee within fourteen days of the purchase of the notified Agricultural produce or its import into the market area for [processing or manufacturing) and in default he shall be liable to pay the market fee together with the interest at the rate of twenty four percent per annum.
(2) If the person liable to pay the market fee and the interest under sub-section (1) fails to pay the same 30 W.P.No.8512/2016 within one month, such person shall not be allowed to enter into further transactions in that market area or any other market area and the market fee with interest shall be recovered as arrears of land revenue and the licence of such person shall be liable to be cancelled.]"
41. This Court is of considered opinion that the petitioner shall be liable to pay interest @ 24% from the date of impugned order till the actual payment is made.
42. No other argument is raised.
43. The petition fails and is hereby dismissed.
(G.S. AHLUWALIA) JUDGE VB* VARSHA CHOURASIYA 2024.07.30 15:36:57 +05'30'