Karnataka High Court
Sri Shivashankarappa T vs The State Of Karnataka on 6 December, 2022
WP NO.21428 OF 2022
A/W
WP NO.21433 OF 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 06TH DAY OF DECEMBER, 2022
BEFORE
THE HON'BLE MR. JUSTICE E.S. INDIRESH
WRIT PETITION NO.21428 OF 2022 (CS-RES)
A/W
WRIT PETITION NO.21433 OF 2022
IN WP NO.21428 OF 2022
BETWEEN:
1. SRI SHIVASHANKARAPA T
S/O T ESHWARAPPA
AGED ABOUT 58 YEARS
DIRECTOR SHIMUL
HIREJAMBUR
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577428.
2. SRI B M MRUTYUNJAYA
S/O MOHANAPPA
AGED ABOUT 42 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
3. SRI J MALTHESHAPPA
S/O BHARMAYYA
AGED ABOUT 62 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
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WP NO.21433 OF 2022
4. SRI T SHEKARAPPA
S/O BASAVARAYAPPA
AGED ABOUT 69 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGA DISTRICT-577427.
5. SRI H MAHESHAPPA
S/O GURUSHANTAPPA
AGED ABOUT 56 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
6. SRI T KIRANKUMAR
S/O SHIVAMURTHYGOWDA
AGED ABOUT 47 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
7. SRI HANUMANTHAPPA
S/O RUDRAPPA
AGED ABOUT 56 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
8. SRI M NAGARAJ
S/O CHANDRAPPA
AGED ABOUT 48 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
9. SRI S OMKARAPPA
S/O SHIVAPPA
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WP NO.21433 OF 2022
AGED ABOUT 44 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
10. SRI HANUMANTHAPPA KASAMBI
S/O HANUMANTHAPPA
AGED ABOUT 52 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
11 . SRI HIRIYAKSHAMMA
W/O GANESHAPPA
AGED ABOUT 56 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
12 . SRI ANUSUYAMMA
W/O SHIVAPPA
AGED ABOUT 60 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
13 . SRI JAYAPPA
S/O HANUMANTHAPPA
AGED ABOUT 68 YEARS
HIREJAMBURU VILLAGE
SHIKARIPURA TALUK
SHIVAMOGGA DISTRICT-577427.
...PETITIONERS
(BY SRI JAYAKUMAR S PATIL, SENIOR ADVOCATE FOR
SRI VARUN J PATIL, ADVOCATE)
4 WP NO.21428 OF 2022
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WP NO.21433 OF 2022
AND:
1 . THE STATE OF KARNATAKA
DEPARTMENT OF CO-OPERATION
VIDHANASOUDHA
BENGALURU-560001
REPRESENTED BY ITS
PRINCIPAL SECRETARY.
2. THE DEPUTY REGISTRAR OF
CO-OPERATIVE SOCIETIES
SHIVAMOGGA
SHIVAMOGGA DISTRICT-577201.
3. THE ASSISTANT REGISTRAR OF
CO-OPERATIVE SOCIETIES
SAGAR SUB DIVISION
SAGAR-577401.
4. THE SHIMOGA DAVANGERE
AND CHITRADURGA DISTRICT
CO-OPERATIVE MILK PRODUCERS UNION
SHIVAMOGGA DISTRICT-577428
REPRESENTED BY ITS
MANAGING DIRECTOR.
A SOCIETY REGISTERED UNDER KARNATAKA
CO-OPERATIVE SOCIETIES ACT, 1959.
5 . THE HIREJUMBUR MILK PRODUCER
CO-OPERATIVE SOCIETY
HIREJAMBUR POST
SHIKARIPUR TALUK
SHIVAMOGGA DISTRICT-577428.
REPRESENTED BY ITS SECRETARY
A SOCIETY REGISTERED UNDER KARNATAKA
CO-OPERATIVE SOCIETIES ACT, 1959.
....RESPONDENTS
5 WP NO.21428 OF 2022
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WP NO.21433 OF 2022
(BY SMT. A R SHARADMABA, AGA FOR R1 TO 3;
SRI VINAYAKA B, ADVOCATE FOR R4;
SRI K DIWAKARA, SENIOR COUNSEL FOR
SRI ABHISHEK KUMAR, ADVOCATE FOR
IMPLEADING APPLICANT ON IA 1 OF 2022;
R5 SERVED UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED ORDER DATED 18.10.2022 IN APPEAL
NO.DRS/APL/02/2022-23 PASSED BY R2 VIDE ANNEXURE-F.
IN WP NO.21433 OF 2022
BETWEEN:
SRI H K BASAPPA
S/O LATE BASAPPA
AGED ABOUT 54 YEARS
KANCHUGARANAHALLI
DAGINAKATTA POST
CHANNAGIRI TALUK
DAVANAGERE-577 213.
...PETITIONER
(BY SRI JAYAKUMAR S PATIL, SENIOR ADVOCATE FOR
SRI VARUN J PATIL, ADVOCATE)
AND:
1 . THE STATE OF KARNATAKA
DEPARTMENT OF CO-OPERATION
VIDHANASOUDHA
BENGALURU-560001
REPRESENTED BY ITS
PRINCIPAL SECRETARY.
2. THE SHIMOGA DAVANGERE AND
6 WP NO.21428 OF 2022
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WP NO.21433 OF 2022
CHITRADURGA DISTRICT
CO-OPERATIVE MILK PRODUCERS UNION
SHIVAMOGGA
SHIVAMOGGA DISTRICT-577 418
REPRESENTED BY ITS MANAGING DIRECTOR.
A SOCIETY REGISTERED UNDER KARNATAKA
CO-OPERATIVE SOCIETIES ACT, 1959.
3. THE DEPUTY REGISTRAR
DAVANGERE DISTRICT
DAVANGERE-577 002.
4. THE ASSISTANT REGISTRAR
DAVANGERE SUB-DIVISION
DAVANAGERE-577 005.
5. KANCHUGARANAHALLI MILK PRODUCER
CO-OPERATIVE SOCIETY
KANCHUGARANAHALLI
CHANNAGIRI TALUK
DAVANGERE DISTRICT-577 213
REPRESENTED BY ITS SECRETARY
A SOCIETY REGISTERED UNDER KARNATAKA
CO-OPERATIVE SOCIETIES ACT, 1959.
....RESPONDENTS
(BY SMT. H C KAVITHA, HCGP, FOR R1, 3 AND 4;
SRI VINAYAKA B, ADVOCATE FOR R2;
SRI K DIWAKARA, SENIOR COUNSEL FOR
SRI ABHISHEK KUMAR, ADVOCATE FOR
IMPLEADING APPLICANT ON IA 1 OF 2022;
R5 SERVED UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT
RESPONDENT No.2 TO PERMIT THE PETITIONER TO CARRY OUT
HIS FUNCTION AS THAT OF A DIRECTOR AND VICE PRESIDENT
IN PURSUANCE OF THE INTERIM ORDER GUARANTEED BY
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WP NO.21433 OF 2022
RESPONDENT NO.3 DR/DVG/106/APPEAL/03/2022-23 VIDE
ORDER DATED 28.09.2022 AS PER ANNEXURE-D; AND ETC.
IN THESE WRIT PETITIONS, ARGUMENTS BEING HEARD,
JUDGMENT RESERVED, COMING ON FOR "PRONOUNCEMENT OF
ORDERS", THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Since common questions are raised in these writ petitions, these two petitions are clubbed and heard together. Though these writ petitions were listed for hearing on Interlocutory application, however, learned counsel appearing for the parties, submitted that writ petitions be taken up for final disposal.
Accordingly, the petitions are heard finally.
2. In Writ Petition No.21428 of 2022, petitioners have questioned the order dated 18th October, 2022 in Appeal No.DRS/APL/02/2022-23 passed by the respondent No.2 (Annexure-F). In Writ Petition No.21433 of 2022, petitioner is seeking writ of mandamus against the respondent No.2 to permit the petitioner to carry out his function as a Director and Vice-
President in terms of the Interim Order dated 28th September, 2022 passed by respondent No.3 therein (Annexure-D) to the writ petition.
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3. Facts in Writ Petition No.21428 of 2022 are that, the petitioners are the Directors of the respondent No.5-The Hirejambur Milk Producers Co-operative Society (for short hereinafter referred to as the 'Society'). Petitioner No.1 has been elected as one of the Directors of the respondent No.4-The Shivamogga, Davanagere and Chitradurga District Co-operative Milk Producers Union (for short hereinafter referred to as the 'Union'). It is stated that the respondent No.3 has issued disqualification notice under Section 29C of the Karnataka Co-
operative Societies Act, 1959 (for short hereinafter referred to as the 'Act') to the petitioners seeking explanation on the allegation set out at paragraph 2 of the writ petition. Thereafter, the respondent No.3, after considering the explanation offered by the petitioners, by exercising power under Section 29C(8)(b) of the Act, passed order dated 31st December, 2021 (Annexure-A) disqualifying the petitioners for a period of four years for the post of Directors of the respondent No.5-Society. Being aggrieved by the same, petitioners have filed Writ petition No.233 of 2022 and connected matters before this Court challenging the disqualification order passed by the respondent-
9 WP NO.21428 OF 2022A/W WP NO.21433 OF 2022 authority and this Court, by order dated 28th April, 2022 allowed the Writ petitions (Annexure-B). The said order dated 28th April, 2022 passed in writ petition No.233 of 2022 and connected matters was challenged in Writ Appeal No.420 of 2022 and connected Appeals before the Division Bench of this Court and the Division Bench, by order dated 29th July, 2022, (Annexure-C) set aside the order of the learned Single Judge and as such, reserved liberty to the parties to approach the competent authority to exhaust the alternative remedy under the Act, for redressal of their grievance. Order dated 29th July, 2022 in Writ Appeal No.420 of 2022 and connected Appeals, was confirmed by the Hon'ble Apex Court in Special Leave Petition No.15263 of 2022 dated 16th September, 2022 (Annexure-D). Thereafter, petitioners have preferred appeal before the respondent No.2 under Section 106 of the Act, challenging the order of disqualification passed by the respondent No.3 (Annexure-A). In the said appeal, petitioners have filed application in IA.2 seeking stay of the order of disqualification passed by the respondent No.3 and the said application came to be dismissed by the Appellate Authority as per impugned order dated 18th October, 10 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 2022. Being aggrieved by the same, petitioners have preferred this petition.
4. In Writ Petition No.21433 of 2022, the petitioner has sought for writ of mandamus directing the respondent No.2 to permit the petitioner to carry out function as Director and Vice-
President in terms of the Interim Order dated 28th September, 2022.
5. This Court, by order dated 31st October, 2022 granted interim stay of orders dated 31st December, 2021 and 18th October, 2022, passed by the respondent-authorities.
6. On service of notice, respondents entered appearance and filed statement of objection/application seeking vacation of interim order dated 31st October, 2022. In the meanwhile, IA.I of 2022 is filed by the impleading applicants, who have been co-opted for the vacancy caused in the respondent-Union on 07th January, 2022. The said application was resisted by the petitioners by filing objection to IA.1 of 2022.
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7. I have heard Sri Jayakumar S. Patil, learned Senior Counsel appearing on behalf of Sri Varun J. Patil, for the petitioners; Sri R. Subramanya, learned Additional Advocate General for respondent-State; and Sri Vinayak, learned counsel appearing for respondent-Union; Sri K Diwakara, learned Senior Counsel for appearing on behalf of Sri Abhishek Kumar for impleading applicants. Respondent No.5-Society is served, remained absent.
8. Sri Jayakumar S. Patil, learned Senior Counsel appearing for the petitioners contended that the petitioners have challenged the disqualification order before the competent authority and had the benefit of the interim order passed by the competent authority in the beginning but by virtue of the Impugned order, the stay granted by the original authority disqualifying the petitioners, is being revived. Learned Senior Counsel submitted that in view of the judgment passed by the Hon'ble Supreme Court in the case of POONAM v. STATE OF UTTAR PRADESH AND OTHERS reported in (2016)2 SCC 779, the respondent-authorities ought not to have rejected the 12 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 application seeking stay of disqualification. Referring to paragraph 13 of the order dated 13th December, 2017 passed in the case of THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES AND OTHERS v. SRI VASUDEV K.V. AND OTHERS made in Writ Appeal Nos.4623 of 2017 and connected appeals, learned Senior Counsel argued that, if the interim order of stay is not granted by the respondent-authority and in the event, if the writ petitioners succeed before the Appellate Authority and the order of disqualification is reversed, the rights accrued in favour of the petitioners during the pendency of the appeal, would not enure to the benefit of the petitioners. Learned Senior Counsel, further argued that granting of stay is a rule in appellate proceedings and not an exception and therefore, the impugned order requires to be interfered with in these writ petitions. In this regard, the learned Senior Counsel relied upon the judgment of Hon'ble Supreme Court in the case of RAVIKANT S. PATIL v. SARVABHOUMA S. BAGALI reported in (2007)1 SCC
673. He further argued on the application filed by the impleading applicants that they are not necessary and proper parties to the writ petition.
13 WP NO.21428 OF 2022A/W WP NO.21433 OF 2022
9. Per contra, Sri Subramanya, learned Additional Advocate General contended that, since the petitioners have been disqualified by the original authority from their Directorship of the primary society, they have no locus standi to be part of Director of respondent-Federal Society.
10. Sri Vinayak, learned counsel appearing for the respondent-Union, contended that Petitioners have not approached this Court with clean hands and are urging the same grounds that are argued in writ petition No.233 of 2022 and therefore, writ petitions deserve to be dismissed in view of the order passed by the Division Bench of this Court in Writ appeal No.420 of 2022 dated 29th July, 2022 confirmed by the Hon'ble Apex Court as per the order dated 16th September, 1022 produced at Annexure-D to the writ petition. He also invited the attention of the Court to Section 29E read with Section 18B of the Act and argued that in view of vacancy created on account of removal of the petitioners from the primary membership due to disqualification order passed by the respondent-authority, the co-option of two members (impleading applicants), by the 14 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 respondent No.4, is just and proper and same is within the purview of proviso to Section 29E of the Act. In this regard, he referred to the judgment of the Hon'ble Apex Court in the case of RAM KUMAR v. STATE OF UTTAR PRADESH reported in AIR 2022 SC 4705. He also referred to the judgment of this Court in the case of CHANDRAHASA v. THE DEPUTY REGISTRAR OF CO-
OPERATIVE SOCIETIES made in Writ Petition No.724 of 2022 decided on 22nd September, 2020, wherein this Court, for redressal of their grievance, directed the parties to approach appropriate Forum-Election Tribunal and as such, sought for dismissal of writ petitions.
11. Sri K. Diwakara, learned Senior Counsel appearing for the impleading applicants, contended that the petitioners, deliberately, have not made the impleading applicants as respondents in these writ petitions, though the impleading applicants were parties in writ petition No.233 of 2022 and in Writ Appeal No.420 of 2022, which came to be confirmed by the Hon'ble Supreme Court and therefore, the impleading applicants are necessary and proper parties for effective adjudication of the 15 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 matter and accordingly, sought for allowing the impleading application. Sri Diwakara, learned Senior Counsel, argued on merits of the case by inviting the attention of the Court to the operative portion of the order passed in Writ petition No.233 of 2022 and connected petitions, particularly Sl.No.(vi) of the Order and contended that the petitioners were well aware about this Court setting aside the resolution dated 07th January, 2022 and therefore, the learned Senior Counsel submitted that the petitioners have not approached the Court with clean hands. He also argued that the petitioners have not challenged the resolution dated 07th January, 2022 passed by the respondent-
Union co-opting the impleading applicants and therefore, the impugned order passed by the competent authority is just and proper. He further submitted that the petitioners being disqualified under Section 29C of the Act from the Directorship of respondent No.5-Society on 31st December, 2021 and the petitioner No.1 was the delegate of the Primary Society and having been disqualified from the primary membership, he ceases to be the Director of the respondent-Union and therefore, co-opting impleading applicants in terms of resolution dated 16 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 07th January, 2022 is just and proper and does not call for interference in these writ petitions. He also invited the attention of the Court to the Order on IAs.II and V of 2022 in Writ Petition No.233 of 2022 and argued that the co-opted members/impleading applicants were inducted in the above petitions and therefore, contended that the writ petitions deserve to be dismissed on the ground of non-joinder of impleading applicants. He also contended that in view of appointment of the impleading applicants as co-opted Members to respondent-Union, the post of Director, which was earlier occupied by the petitioner (in Writ petition No.21433 of 2022) fell vacant due to disqualification of his Directorship and as such, the impleading applicant, was rightly appointed under Section 29E of the Act and therefore, the said post is vacant as on date and therefore, writ petitions deserve to be dismissed since the appeal is pending consideration before the competent authority.
12. Having heard the learned counsel appearing for the parties, it is not in dispute that the respondent No.3 has initiated 17 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 suo motu proceedings against the petitioners herein under Section 29C of the Act in Dispute No.AR-25/1/2021-22 and the respondent No.3, by its order dated 31st December, 2021, disqualified the petitioners from the membership of the respondent No.5-Society (Annexure-A) and the said order was challenged before this Court in Writ Petition No.233 of 2022 and connected petitions, and this Court, by order dated 28th April, 2022, allowed the writ petitions and as such, the order dated 31st December, 2021 was quashed. It is also to be noted that, this Court while quashing the disqualification order dated 31st December, 2021, set-aside the subsequent resolution dated 07th January, 2022 co-opting Sri. Vikram M. Patil and Sri. Harish N.D as Members. Thereafter, order dated 28th April, 2022 passed by the learned Single judge in Writ petition No.233 of 2022 and connected petitions was questioned in Writ Appeal No.420 of 2022 and the Division Bench of this Court, by order 29th July, 2022 set-aside the order dated 28th April, 2022 passed in Writ Petition No.233 of 2022 and connected petitions and as such, directed the petitioners herein to approach the competent authority for redressal of their grievance, as the petitioners are 18 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 having efficacious remedy under the Act. Order dated 29th July, 2022 passed in Writ Appeal No.420 of 2022 was confirmed by the Hon'ble Supreme Court in Special Leave Petition No.15263 of 2022, by order dated 16th September, 2022 (Annexure-D).
Pursuant to same, the petitioners herein have filed Appeal No.DRS/APL/2/2022-23 before the respondent No.2 herein.
Along with the main appeal, petitioners have filed application in IA.2, seeking an interim order staying the operation of order dated 31st December, 2021. The said application was dismissed by the second respondent by order dated 18th October, 2022 with these facts on record. I have carefully examined the reasons assigned by the respondent No.2 while dismissing the application filed by the petitioners seeking interim order of staying the order dated 31st December, 2021 passed by the respondent No.3. The same reads thus:
"ªÀÄzsÀåAvÀgÀ Cfð ªÀÄvÀÄÛ CzÀgÉÆA¢V£À zÁR¯ÁwUÀ¼ÀÄ ªÉÄîä£À«zÁgÀgÀ ¥ÀgÀ ªÀQîgÀÄ ¸À°è¹zÀ ªÀiËTPÀ ªÁzÀªÀ£ÀÄß D°¹zÀÄÝ, CªÀÅUÀ¼À°è£À CA±ÀUÀ¼À£ÀÄß «ªÀıÁðvÀäPÀªÁV CªÀ¯ÉÆÃQ¸À¯ÁV, F PɼÀPÀAqÀAvÉ wêÀiÁð¤¹zÉ.19 WP NO.21428 OF 2022
A/W WP NO.21433 OF 2022 ªÉÄîä£À«zÁgÀgÀÄ ¸À°è¹gÀĪÀ ªÀÄzsÀåAvÀgÀ Cfð-02 ªÀÄvÀÄÛ CzÀgÉÆA¢UÉ ¸À°è¹zÀ ¥ÀæªÀiÁt ¥ÀvÀæzÀ°è£À PÁgÀtUÀ¼À£ÀÄß ºÁUÀÆ F ªÉÄÃ¯É «ªÀj¹zÀ jmï ¦nµÀ£ï ªÀÄvÀÄÛ jmï C¦Ã¯ï ¥ÀæPÀgÀtUÀ¼À°è ªÀiÁ£Àå UËgÀªÀ GZÀÑ £ÁåAiÀiÁ®AiÀĪÀÅ ¤ÃrzÀ DzÉñÀUÀ¼À°è£À CA±ÀUÀ¼À£ÀÄß UÀªÀĤ¸À¯ÁVzÉ. ¥Àæ²ßvÀ DzÉñÀªÀ£ÀÄß ªÀiÁqÀĪÀ ¥ÀƪÀðzÀ°è JzÀÄgÀÄzÁgÀgÀÄ ªÉÄîä£À«zÁgÀjUÉ ¸ÀºÀPÁgÀ ¸ÀAWÀUÀ¼À PÁAiÉÄÝ ªÀÄvÀÄÛ ¤AiÀĪÀÄUÀ¼ÀAvÉ ¸ÀÆPÀÛ PÁ¯ÁªÀPÁ±ÀªÀ£ÀÄß ¤ÃrgÀÄvÁÛgÉ. DzÀÝjAzÀ F ºÀAvÀzÀ°è vÀqÉAiÀiÁeÉÕ ¤ÃqÀĪÀÅzÀÄ ¸ÀÆPÀÛªÀ®èªÉAzÀÄ C©ü¥ÁæAiÀÄzÀ ªÉÄÃgÉUÉ ªÀÄzsÀåAvÀgÀ Cfð ¸ÀA.02 C£ÀÄß wgÀ¸ÀÌj¸À®Ä wêÀiÁ𤹠F PɼÀPÀAqÀAvÉ DzÉò¹zÉ.
: D zÉà ±À :
F ªÉÄîÌAqÀAvÉ «ªÀj¹ wêÀiÁð¤¹zÀAvÉ, ªÉÄîä£À«zÁgÀgÀÄ ªÀÄzsÀåAvÀgÀ Cfð-02 gÀ°è ¥Àæ²ßvÀ DzÉñÀPÉÌ vÀqÉAiÀiÁeÉÕ ¤ÃqÀ®Ä PÉÆÃj ¸À°è¹zÉ ªÀÄ£À«AiÀÄ£ÀÄß wgÀ¸ÀÌj¹ DzÉò¹zÉ.
F DzÉñÀªÀ£ÀÄß vÉgÉzÀ £ÁåAiÀiÁ®AiÀÄzÀ°è ¢£ÁAPÀ:18-10- 2022gÀAzÀÄ §»gÀAUÀªÁV WÉÆö¹zÉ. ºÁUÀÆ £ÁåAiÀiÁ®AiÀÄzÀ ªÀÄÄzÉæ ªÀÄvÀÄÛ ¸À»AiÉÆA¢UÉ ¤ÃrzÉ."
13. On perusal of the impugned order, I am of the view that, except narrating the proceedings before the respondent 20 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 No.3, in writ petition; writ appeal; and order passed by the Hon'ble Supreme Court, the respondent No.2 has failed to give reasons for rejecting the application and not accepting the application filed by the petitioners seeking interim order of stay.
Being a quasi-judicial authority, while exercising the power under Section 106 of the Act, the respondent No.2 ought to have considered the grievance urged by the petitioners in Application seeking stay of the order and considered the same on merits.
The question relating to rationale of requirement to recording reasons for decision of an Administrative Authority exercising quasi-judicial function, was extensively considered by the Constitution Bench of the Hon'ble Supreme Court in the case of S.N. MUKHERJEE v. UNION OF INDIA reported in (1990)4 SCC 594, wherein at paragraphs 11 to 40 of the judgment, it is observed thus:
"11. In the United States the courts have insisted upon recording of reasons for its decision by an administrative authority on the premise that the authority should give clear indication that it has exercised the discretion with which it has been empowered because "administrative process will best be vindicated by clarity 21 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 in its exercise" (Phelps Dodge Corporation v. National Labour Relations Board) [1940] 85 Law Edn. 1271 at P. 1284. The said requirement of record- ing of reasons has also been justified on the basis that such a decision is subject to judicial review and "the Courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review" and that "the orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained." Securities and Exchange Commission v. Chenery Corporation, [1942] 87 Law Ed. 626 at P. 636. In John T. Dunlop v. Waiter Bachowski, [1975] 44 Law Ed. 2 377) it has been observed that a statement of reasons serves purposes other than judicial review inasmuch as the reasons promotes thought by the authority and compels it to cover the relevant points and eschew irrelevancies and assures careful administrative consideration. The Federal Administrative Procedure Act, 1946 which prescribed the basic procedural principles which are to govern formal administrative procedures contained an express provision [Section 8(b)] to the effect that all decisions shall indicate a statement of findings and conclusions as well as reasons or basis the, for upon all the material issues of fact, law or discretion presented on the record. The said provision is now contained in Section 557(c) of Title 5 of the United States Code (1982 edition). Similar provision is contained in the state statutes.22 WP NO.21428 OF 2022
A/W WP NO.21433 OF 2022
12. In England the position at Common law is that there is no requirement that reasons should be given for its decision by the administrative authority (See: Regina v. Gaming Board for Great Britain Ex Party Benaim and Khaida, [1970] 2 Q.B. 417 at p. 431 and McInnes v. Onslow-Fane and Another, [1978] 1 W.L.R. 1520 at p. 1531). There are, however, observations in some judgments wherein the importance of reasons has been emphasised. In his dissenting judgment in Breen v.
Amalgamated Engineering Union and Others, [1971] 2 Q.B. 175 Lord Denning M.R., has observed that "the giving of reasons is one of the fundamental of good administration."
13. In Alexander Machinery (Dudley) Ltd. v. Crabtree, [1974] ICR 120 Sir John Donaldson, as President of the National Industrial Relations Court, has observed that "failure to give reasons amounts to a denial of justice."
14. In Regina v. Immigration Appeal Tribunal Ex parte Khan (Mahmud), [1983] QB 790 Lord Lane, CJ., while expressing his reservation on the proposition that any failure to give reasons means a denial of justice, has observed:
"A party appearing before a tribunal is entitled to know either expressly stated by the tribunal or inferentially stated, what it is to which the tribunal is addressing its mind."23 WP NO.21428 OF 2022
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15. The Committee on Ministers' Powers (Donoughmore Committee) in its report submitted in 1932, recommended that "any party affected by a decision should be informed of the reasons on which the decision is based" and that "such a decision should be in the form of a reasoned document avail- able to the parties affected." (P. 100) The Committee on Administrative Tribunals and Enquiries (Franks Committee) in its report submitted in 1957, recommended that "decisions of tribunals should be reasoned and as full as possible." The said Committee has observed:
"Almost all witnesses have advocated the giving of reasoned decisions by tribunals. We are convinced that if tribunal proceedings are to be fair to the citizen reasons should be given to the fullest practicable extent. A decision is apt to be better if the reasons for it have to be set out in writing because the reasons are then more likely to have been properly thought out. Further, a reasoned decision is essential in order that, where there is a right of appeal, the applicant can assess whether he has good grounds of appeal and know the case he will have to meet if he decides to appeal."
16. The recommendations of the Donoughmore Committee and the Franks Committee led to the enactment of the Tribunals and Enquiries Act, 1958 in United Kingdom. Section 12 of that Act prescribed that it shall be the duty of the Tribunal or Minister to furnish a statement, either written or oral, of the reasons for the decision if requested, on or before the giving of 24 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 notification of the decision to support the deci- sion. The said Act has been replaced by the Tribunals and Enquiries Act, 1971 which contains a similar provision in Section
12. This requirement is. however, confined. in its applications to tribunals and statutory authorities specified in Schedule I to the said enactment. In respect of the tribunals and authorities which are not covered by the aforesaid enactment, the position, as prevails at common law, applies. The Committee of Justice in its Report, Administration Under Law, submitted in 1971, has expressed the view:
"No single factor has inhibited the development of English administrative law as seriously as the absence of any general obligation upon public authorities to give reasons for their decisions."
17. The law in Canada appears to be the same as in England. In Pure Spring Co. Ltd. v. Minister of National Revenue, [1947] 1 DLR 501 at P. 539 it was held that when a Minister makes a determination in his discretion he is not required by law to give any reasons for such a determination. In some recent decisions, however, the Courts have recognised that in certain situations there would be an implied duty to state the reasons or grounds for a decision (See: Re R D.R. Construction Ltd. And Rent Review Commission, [1983] 139 DLR (3d) 168) and Re Yarmouth Housing Ltd. And Rent Review Commission, [1983] 139 DLR (3d) 544. In the Province of Ontario the Statutory Powers Procedure Act, 1971 was enacted which 25 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 provided that "a tribunal shall give its final deci- sion, if any, in any proceedings in writing and shall give reasons in writing therefore if requested by a party." (Section
17.). The said Act has now been replaced by the Statutory Powers and Procedure Act, 1980, which contains a similar provision.
18. The position at common law is no different in Australia. The Court of Appeal of the Supreme Court of New South Wales in Osmond v. Public service Board of New South Wales, [1985]3 NSWLR 447) had held that the common law requires those entrusted by Statute with the discretionary power to make decisions which will affect other persons to act fairly in the performance of their statutory functions and normally this will require an obligation to state the reasons for their decisions. The said decision was overruled by the High Court of Australia in Public Service Board of New South Wales v. Osmond, [1986] 63 ALR 559 and it has been held that there is no general rule of the common law, or principle of natural justice, that requires reasons to be given for administrative decisions, even decisions which have been made in the exercise of a statutory discretion and which may adversely affect the interests or defeat the legitimate or reasonable expectations, of other persons. Gibbs CJ., in his leading judgment, has expressed the view that "the 'rules of natural justice are designed to ensure fairness in the making of a decision and it is difficult to see how the fairness of an administrative decision can be affected by 26 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 what is done after the decision has been made." The learned Chief Justice has. however. observed that "even assuming that in special circumstances natural justice may require reasons to be given, the present case is not such a case." (P. 568). Deane J., gave a concur- ring judgment, wherein after stating that "the exercise of a decision making power in a way which adversely affects others is less likely to be. or appear to be, arbitrary if the decision-maker formulates and provides reasons for his decision", the learned Judge has proceeded to hold that "the stage has not been reached in this country where it is a general prima facie requirement of the common law rules of natural justice or procedural fair play that the administrative decision-maker. having extended to persons who might be adversely affected by a decision an adequate opportunity of being heard. is bound to furnish reasons for the exercise of a statutory decision-making power." (P. 572). The learned Judge has further observed that the common law rules of natural justice or procedural fair play are neither standardised nor immutable and that their content may vary with changes in contemporary practice and standards. In view of the statutory developments that have taken place in other countries to which reference was made by the Court of Ap- peal, Deane, J. has observed that the said developments "are conducive to an environment within which the courts should be less reluctant than they would have been in times past to discern in statutory provisions a legislative 27 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 intent that the particular decision-maker should be under a duty to give reasons." (P. 573).
19. This position at common law has been altered by the Commonwealth Administrative Decisions (Judicial Review) Act. 1977. Section 13 of the said Act enables a person who is entitled to apply for review the decision before the Federal Court to request the decision-maker to furnish him with a statement in writing setting out the findings on material questions of fact, referring to the evidence or other mate- rial on which those findings were based and giving the reasons for the decision and on such a request being made the decision-maker has to prepare the statement and furnish it to the persons who made the request as soon as practicable and in any event within 28 days. The provisions of this Act are not applicable to the classes of decisions mentioned in Schedule I to the Act. A similar duty to give reasons has also been imposed by Section 28 and 37 of the commonwealth Administrative Appeals Tribunal Act. 1975.
20. In India the matter was considered by the Law Commission in the 14th Report relating to reform in Judicial Administration. The Law Commission recommended: (Vol.II, p.694) "In the case of administrative decisions provision should be made that they should be accompanied by reasons. The reasons will make it possible to test the validity of these decisions by the machinery of appropriate writs."
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21. No laws has, however, been enacted in pursuance of these recommendations, imposing a general duty to record the reasons for its decision by an administrative authority though the requirement to give reasons is found in some statutes.
22. The question as to whether an administrative authority should record the reasons for its decision has come up for consideration before this Court in a number of cases.
23. In M/s. Harinagar Sugar Mills Ltd. V. Shyam Sundar Jhunjhunwala and Others [1962] 2 SCR 339, a Constitution Bench of this Court. while dealing with an order passed by the Central Government in exercise of its appellate powers under Section 111(3) of the Companies Act, 1956 in the matter of refusal by a company to register the transfer of shares, has held that there was no proper trial of the appeals before the Central Government since no reasons had been given in support of the order passed by the Deputy Secretary who heard the appeals. In that case it has been observed: (SCR p.357) "If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Article 136 of the Constitution we fail to see how the power of this Court can be effectively exercised if reasons are not given by the Central Government in support of its order."
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24. In Madhya Pradesh Industries Ltd. V. Union of India and Others [1966] 1 S.C.R. 466 the order passed by the Central Government dismissing the revision petition under Rule 55 of the Mineral Concession Roles, 1960, was challenged before this Court on the ground that it did not contain reasons. Bachawat, J., speaking for himself and Mudholkar, J., rejected this contention on the view that the reason for rejecting the revision application appeared on the face of the order because the Central Government had agreed with the reasons given by the State Government in its order. The learned Judges did not agree with the submission that omission to give reasons for the decision is of itself a sufficient ground for quashing it and held that for the purpose of an appeal under Article 136 orders of courts and tribunals stand on the same footing. The learned Judges pointed out that an order of court dismissing a revision application often gives no reasons but this is not a sufficient ground for quashing it and likewise an order of an administrative tribunal reject- ing a revision application cannot be pronounced to be in- valid on the sole ground that it does not give reasons for the rejection. The decision in Hari Nagar Sugar Mills case (supra) was distinguished on the ground that in that case the Central Government had reversed the decision appealed against without giving any reasons and the record did not disclose any apparent ground for the reversal. According to the learned Judges there is a vital difference between an order of reversal and an order of affirmance. Subba Rao, J., as he then was, did to concur 30 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 with this view and found that the order of the Central Government was vitiated as it did not disclose any reasons for rejecting the revision application. The learned Judge has observed: (SCR pp.472-73) "In the context of a welfare State, administrative tribunals have come to stay. Indeed, they are the necessary concomitants of a Welfare State. But arbitrariness in their functioning destroys the concept of a welfare State itself. Self- discipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds, A reasoned order is a desirable condition of judicial disposal."
"If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officer may turn out to be a potent weapon for abuse of power. But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if its discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction. A speaking order will at its best be a reasonable and at its worst be at least a plausible one. The public should not be deprived of this only safeguard."
"There is an essential distinction between a court and an administrative tribunal. A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but an executive officer generally looks at things from the standpoint of policy and expediency. The habit of 31 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 mind of an executive officer so formed cannot be expected to change from function to function or from act to act. So it is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affecting the rights of parties; and the least they should do is to give reasons for their orders. Even in the case of appellate courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it. But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons."
25. With reference to an order of affirmance the learned Judge observed that where the original tribunal gives rea- sons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons and that what is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by refer- ence to those given by the original tribunal.
26. This matter was considered by a Constitution Bench of this Court in Bhagat Raja case (supra) where also the order under challenge had been passed by the Central Government in exercise of its revisional powers under Section 30 of the Mines and Minerals (Regulation and Development Act, 1957 read with rules 54 and 55 of the Mineral Concession Rules, 1960. Dealing with the question as to whether it was incumbent on the Central 32 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 Government to give any reasons for its decision on review this Court has observed: (SCR p.309) "The decisions of tribunals in India are subject to the supervisory powers of the High Courts under Art. 227 of the Constitution and of appellate powers of this Court under Art. 136. It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected", or "dismissed". In such a case, this Court can probably only exercise its appeallate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal. This will certainly be a very unsatisfactory method of dealing with the appeal."
27. This Court has referred to the decision in Madhya Pradesh Industries case (supra) and the observations of Subba Rao, J., referred to above, in that decision have been quoted with approval. After taking note of the observations of Bachawat, J., in that case, the learned Judges have held:
"After all a tribunal which exercises judicial or quasijudicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of par- ties of far-reaching consequences to them are adjudicated upon in a summary fashion, without giving a personal hearing when proposals and counter proposals are made and examined, the least that can be expected is that the tribunals shall tell the party why the decision is going against him in all cases where the law gives a further right of appeal."33 WP NO.21428 OF 2022
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28. Reference has already been made to Som Datt Datta's case (supra) wherein a Constitution Bench of this Court has held that the confirming authority, while confirming the findings and sentence of a Court-Martial, and the Central Government, while dealing with an appeal under Section 165 of the Act, are not required to record the reasons for their decision and it has been observed that apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, it could not be said that there is any general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision. In that case the Court was primarily concerned with the interpretation of the provisions of Act and the Army Rules, 1954. There is no reference to the earlier decisions in Harinagar Sugar Mills case (supra) and Bhagat Raja case (supra) wherein the duty to record reasons was imposed in view of the appellate jurisdiction of this Court and the supervisory jurisdiction of the High Court under Articles 136 and 227 of the Consti- tution of India respectively.
29. In Travancore Rayon Ltd. V. Union of India, [1970] 3 SCR 4(1 this Court has observed:
"The Court insists upon disclosure of reasons in support of the order on two grounds; one, that the party aggrieved in a proceedings before the High Court or this Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the 34 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 other, that the obligation to record reasons operates as a deter- rent against possible arbitrary action by the executive authority invested with the judicial power."
30. In Mahabir Prasad Santosh Kumar V. State of U.P. and Others (supra) the District Magistrate had cancelled the licence granted under the U.P Sugar Dealers' Licensing Order, 1962 without giving any reason and the State Government had dismissed the appeal against the said order of the District Magistrate without recording the reasons. This Court has held:
"The practice of the executive authority dismissing statutory appeal against orders which prima facie seriously prejudice the rights of the aggrieved party without giving reasons is a negation of the rule of law."
"Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just."
In Woolcombers of India Ltd. case (supra) this Court was dealing with an award of an Industrial Tribunal. It was found that the award stated only the conclusions 35 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 and it did not give the supporting reasons. This Court has observed: (SCR p.507:SCC pp.32021, paragraph 5) "The giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Second, it is a well-known principle that justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi- judicial authorities to this Court by special leave granted under Article
136. A judgment which does not disclose the reasons, will be of little assistance to the Court."
32. In Siemens Engineering & Manufacturing Co. of India Limited case (supra) this Court was dealing with an appeal against the order of the Central Government on a revision application under the Sea Customs Act, 1878. This Court has laid down: (SCR pp.495-96:SCC pp.986- 97, paragraph 6) "It is now settled law that where an authority makes an order in exercise of a quasi-judicial function it must record its reasons in support of the order it makes. Every quasijudicial order must be 36 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 supported by reasons... If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then along administrative authorities and tribunals, exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partera, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law."
33. Tarachand Khatri v. Municipal Corporation of Delhi & Others, [1977] 2 SCR 198 was a case where an inquiry was conducted into charges of misconduct and the disciplinary authority, agreeing with the findings of the Inquiry Officer, had imposed the penalty of dismissal. The said order of dismissal was challenged on the ground that the disciplinary authority had not given its reasons for passing the order. The said contention was negatived by this Court and distinction was drawn between an order of affirmance and an order of reversal. It was observed:
" ..... while it may be necessary for a disciplinary or administrative authority exercising quasi-judicial functions to state the reasons in 37 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 support of its order if it differs from the conclusions arrived at and the recommendations made by the Inquiry Officer in view of the scheme of a particular enactment or the rules made thereunder, it would be laying down the proposition too broadly to say that even an ordinary concurrence must be supported by reasons."
34. In Raipur Development Authority and Others v. Mls. Chokhamal Contractors and Others, [1989] 2 S.C.C. 721 a Constitution Bench of this Court was considering the question whether it is obligatory for an arbitrator under the Arbitration Act, 1940 to give reasons for the award. It was argued that the requirement of giving reasons for the deci- sion is a part of the rules of natural justice which are also applicable to the award of an arbitrator and reliance was placed on the decisions in Bhagat Raja case (Supra) and Siemens Engineering Co. case (Supra). The said contention was rejected by this Court. After referring to the decisions in Bhagat Raja case (Supra); Som Datt Datta case (Supra) and Siemens Engineering Co. case (Supra) this Court has observed:
"It is no doubt true that in the decisions pertaining to Administrative Law, this court in some cases has observed that the giving of reasons in an administrative decision is a rule of natural justice by an extension of the prevailing rules. It would be in the interest of the world of commerce that the said rule is confined to the area of Administrative Law ..... But at the same time it has to be borne in mind that what applies generally to settlement of disputes by authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of 38 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 arbitration which is intended for settlement of private disputes."
35. The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decision making. In this regard a distinction has been drawn between ordinary Courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by considerations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency.
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36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi- judicial functions, would no doubt facilitate the exercise of its juris- diction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the re- cording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasijudicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not 40 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge.
37. Having considered the rationale for the requirement to record the reasons for the decision of an administrative authority exercising quasi-judicial functions we may now examine the legal basis for imposing this obligation. While considering this aspect the Donough more Committee observed that it may well be argued that there is a third principle of natural justice, namely, that a party is entitled to know the reason for the decision, be it judicial or quasi-judicial. The committee expressed the opinion that "there are some cases where the refusal to give grounds for a decision may be plainly unfair; and this may be so, even when the decision is final and no further proceedings are open to the disappointed party by way of appeal or otherwise" and that "where further proceedings are open to a disappointed party, it is contrary to natural justice that the silence of the Minister or the Ministerial Tribunal should deprive them of the opportunity." (P 80) Prof. H.W.R. Wade has also expressed the view that "natural justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man's sense of justice." (See Wade, Administrative Law, 6th Edn. P. 548). In Siemens Engineering Co. case (Supra) this Court has taken the same view when it observed that "the rule requiring reasons to be given in support of an order is, like the principles of audi alteram parlem, a basic 41 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 principle of natural justice which must inform every quasi- judicial process." This decision proceeds on the basis that the two well-known principles of natural justice, namely
(i) that no man should be a Judge in his own cause and
(ii) that no person should be judged without a hearing, are not exhaustive and that in addition to these two principles there may be rules which seek to ensure fairness in the process of decision-making and can be regarded as part of the principles of natural justice. This view is in consonance with the law laid down by this Court in A.K. Kraipak and Others v. Union of India and Others, [1970] 1 SCR 457, wherein it has been held: (SCR pp.468-69:SCC p.272, para 20) "The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules namely:
(i) no one shall be a Judge in his own cause (nemo dabet esse judex propria causa) and (ii) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). 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." (P. 468-69)
38. A similar trend is discernible in the decisions of English Courts wherein it has been held that natural justice demands that the decision should be based on some evidence of probative value. (See: R. v. Deputy Industrial Injuries Commissioner ex P. Moore, [1965] 1 42 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 Q.B. 456; Mahon v. Air New Zealand Ltd., [1984] A.C.
648.
39. The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fairplay in action." As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi- judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that affect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the 43 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would out weight the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case.
40. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision."
(Emphasis supplied)
14. It is also relevant to extract the law declared by the Hon'ble Apex Court in the case of SECRETARY AND CURATOR, VICTORIA MEMORIAL HALL v. HOWRAH GANATANTRIK NAGRIK SAMITY AND OTHERS reported in (2010)3 SCC 732 wherein at paragraphs 40 to 42, it is observed thus:
"40. It is a settled legal proposition that not only administrative but also judicial order must be supported 44 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 by reasons, recorded in it. Thus, while deciding an issue, the Court is bound to give reasons for its conclusion. It is the duty and obligation on the part of the Court to record reasons while disposing of the case. The hallmark of an order and exercise of judicial power by a judicial forum is to disclose its reasons by itself and giving of reasons has always been insisted upon as one of the fundamentals of sound administration justice - delivery system, to make known that there had been proper and due application of mind to the issue before the Court and also as an essential requisite of principles of natural justice. "The giving of reasons for a decision is an essential attribute of judicial and judicious disposal of a matter before Courts, and which is the only indication to know about the manner and quality of exercise undertaken, as also the fact that the Court concerned had really applied its mind."
[Vide State of Orissa Vs. Dhaniram Luhar AIR 2004 SC 1794; and State of Rajasthan Vs. Sohan Lal & Ors. (2004) 5 SCC 573].
41. Reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same, it becomes lifeless. Reasons substitute subjectivity by objectivity. Absence of reasons renders the order indefensible/unsustainable particularly when the order is subject to further challenge before a higher forum. [Vide Raj Kishore Jha Vs. State of Bihar & Ors. AIR 2003 SC 4664; Vishnu Dev Sharma Vs. State of Uttar Pradesh & Ors. (2008) 3 SCC 172; Steel Authority of India Ltd. Vs. 45 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 Sales Tax Officer, Rourkela I Circle & Ors. (2008) 9 SCC 407; State of Uttaranchal & Anr. Vs. Sunil Kumar Singh Negi AIR 2008 SC 2026; U.P.S.R.T.C. Vs. Jagdish Prasad Gupta AIR 2009 SC 2328; Ram Phal Vs. State of Haryana & Ors. (2009) 3 SCC 258; Mohammed Yusuf Vs. Faij Mohammad & Ors. (2009) 3 SCC 513; and State of Himachal Pradesh Vs. Sada Ram & Anr. (2009) 4 SCC 422].
42. Thus, it is evident that the recording of reasons is principle of natural justice and every judicial order must be supported by reasons recorded in writing. It ensures transparency and fairness in decision making. The person who is adversely affected may know, as why his application has been rejected."
15. Having followed the law declared by the Hon'ble Apex Court in the aforementioned judgments, I am of the view that the impugned order is liable to be set aside as the same is without any reasons. That apart, I have carefully examined the scheme of the Act whereby Section 29C of the Act provides that the members of the Society be disqualified for the reasons set out in the said provision. No doubt, the members have been elected democratically among the members of the Society, in the present case, the respondent No.3 has passed the order dated 46 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 31st December, 2021 under Section 29C of the Act, which is a suo motu proceedings, against which appeal was preferred under Section 106 of the Act before the respondent No.2 in Appeal No.2/22-23. Then it is the duty of the respondent No.2 to consider the application on merits with regard to legality of the disqualification order dated 31st December, 2021 passed by the respondent No.3. Application in IA.2 is filed seeking stay of the disqualification order dated 31st December, 2021. Tenure of the Members/Directors/petitioners herein has been fixed from the date of their election to the Managing Committee of the respondent No.5-Society. With these aspects on record, I am of the view that the respondent No.2, being a statutory functionary, must act independently without any external pressure and while considering the application filed by the petitioners seeking interim order, the respondent No.2 who is endowed/invested with the power, purports to act on its own, statutorily. It is the duty of the quasi judicial bodies, like respondent No.2 herein, to follow the judicial proceedings. In this regard, it is relevant to extract the 47 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 observation made at paragraphs 13 and 14 of the judgment in the case of VASUDEV K.V. (supra). The same read thus:
"13. In view of the fact that order passed by the learned Single Judge staying the order of supersession during pendency of the appeal is required to be continued inasmuch as, the refusal would result in civil consequences flowing therefrom namely, writ petitioners would be disqualified and would not be in a position to contest any elections of a co-operative society, these intra-court appeals fails. In the event of writ petitioners succeeding before first appellate authority and if the order dated 06.12.2016 impugned in the writ petitions is not stayed, the rights accruing to the petitioners during the interregnum period would be wiped out or in other words, the clock cannot be put back.
14. Grant of stay in appellate proceedings is a rule and refusal would be an exception. Until and unless there are compelling reasons to discontinue the stay, it would not be appropriate to discontinue the same. In that view of the matter, we are of the considered view that this is not a fit case where order of learned Single Judge calls for interference."
16. The Hon'ble Supreme Court in the case of RAVI YASHWANT BHOIR v. DISTRICT COLLECTOR, RAIGAD AND OTHERS reported in (2012)4 SCC 407 while dealing with scope 48 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 of judicial review with respect to democratic set-up, at paragraphs 23 to 26 of the judgment, has observed thus:
"23. The democratic set-up of the country has always been recognized as a basic feature of the Constitution, like other features e.g. Supremacy of the Constitution, Rule of law, Principle of separation of powers, Power of judicial review under Articles 32, 226 and 227 of the Constitution etc. (Vide Kesavananda Bharati V. State of Kerala, AIR 1973 SC 1461; Minerva Mills Ltd. V. Union of India, AIR 1980 SC 1789; Union of India v. Association for Democratic Reforms & Anr., AIR 2002 SC 2112; Special Reference No.1 of 2002 In re (Gujarat Assembly Election Matter), AIR 2003 SC 87; and Kuldip Nayar V. Union of India & Ors. AIR 2006 SC 3127).
24. It is not permissible to destroy any of the basic features of the Constitution even by any form of amendment, and therefore, it is beyond imagination that it can be eroded by the executive on its whims without any reason. The Constitution accords full faith and credit to the act done by the executive in exercise of its statutory powers, but they have a primary responsibility to serve the nation and enlighten the citizens to further strengthen a democratic State.
25. Public administration is responsible for the effective implication of the rule of law and constitutional 49 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 commands which effectuate fairly the objective standard set for adjudicating good administrative decisions. However, wherever the executive fails, the Courts come forward to strike down an order passed by them passionately and to remove arbitrariness and unreasonableness, for the reason, that the State by its illegal action becomes liable for forfeiting the full faith and credit trusted with it. (Vide Scheduled Castes and Scheduled Tribes Officers' Welfare Councilv. State of U.P., AIR 1997 SC 1451; and State of Punjab v. G.S. Gill AIR 1997 SC 2324).
26."Basic" means the basis of a thing on which it stands, and on the failure of which it falls. In democracy all citizens have equal political rights. Democracy means actual, active and effective exercise of power by the people in this regard. It means political participation of the people in running the administration of the Government. It conveys the State of affair in which each citizen is assured of the right of equal participation in the polity. (See R.C. Poudiyal v. Union of India, AIR 1993 SC 1804) "
17. The legal frame work relating to the working of the co-operative Society was considered by the Hon'ble Apex Court in the case of STATE OF MADHYA PRADESH AND OTHERS v.
SANJAY NAGAYACH AND OTHERS reported in (2013)7 SCC 25, 50 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 wherein at paragraphs 14 and 36 and 37 of the judgment, it is observed thus:
"14. Co-operative philosophy on society must rest on free universal association, democratically governed and conditioned by equity and personal liberty. First legislation in India relating to cooperative societies was the Co-operative Societies Act, 1904, established for the purpose of credit only, but to extend the privilege of credit societies to other societies also a legislation with wider scope and object, that is Co-operative Societies Act 1912, was passed which was applicable to the whole of British India, which was a Central Act. Later, after independence different States enacted separate Acts of which we are in this case concerned with the 1960 Act in force in the State of Madhya Pradesh.
15 to 35. xxx xxx xxx
36. Statutory functionaries like Registrar/Joint Registrar of Co- operative Societies functioning under the respective Co-operative Act must be above suspicion and function independently without external pressure. When an authority invested with the power purports to act on its own but in substance the power is exercised by external guidance or pressure, it would amount to non- exercise of power, statutorily vested. Large number of cases are coming up before this Court and the High Courts in the country challenging the orders of 51 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 supersession and many of them are being passed by the statutory functionaries due to external influence ignoring the fact that they are ousting a democratically elected Board, the consequence of which is also grave because the members of the Board of Directors would also stand disqualified in standing for the succeeding election as well.
37. The Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with pre-conceived notion and shall not speak his masters' voice, because the formation of opinion must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In our view, the impugned order will not fall in that category."
18. Following the law declared by the Division Bench of this Court and the judgment of the Hon'ble Supreme Court in the aforestated cases, I am of the view that the respondent No.2 has proceeded wrongly, holding that granting of interim order would amount to granting the main relief itself, however, undisputably, 52 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 rejected the application whimsically and without reasons. Any order passed sans reasons, is violation of Article 14 of the Constitution of India and therefore, I am of the view that the impugned order dated 18th October, 2022 (Annexure-F) is liable to be set aside.
19. Insofar as the argument advanced by learned Senior Counsel Sri K. Diwakara, appearing for the impleading applicants challenging the impugned order, it is relevant to extract the observation made at paragraphs 49, 50 and 53 of the judgment of Hon'ble Supreme Court in the case of POONAM (supra). The same read thus:
"49. In the instant case, shop no.2 had become vacant. The appellant was allotted the shop, may be in the handicapped quota but such allotment is the resultant factor of the said shop falling vacant. The original allottee, that is the respondent, assailed his cancellation and ultimately succeeded in appeal. We are not concerned with the fact that the appellant herein was allowed to put her stand in the appeal. She was neither a necessary nor a proper party. The appellate authority permitted her to participate but that neither changes the situation nor does it confer any legal status on her. She would have 53 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 continued to hold the shop had the original allottee lost the appeal. She cannot assail the said order in a writ petition because she is not a necessary party. It is the State or its functionaries, who could have challenged the same in appeal. They have maintained sphinx like silence in that regard. Be that as it may, that would not confer any locus on the subsequent allottee to challenge the order passed in favour of the former allottee. She is a third party to the lis in this context.
50. The decisions which we have referred to hereinbefore directly pertain to the concept of necessary party. The case of Kailash Chand Mahajan (supra) makes it absolutely clear. We have explained the authority in J.S. Yadav's case (supra) and opined that it has to rest on its own facts keeping in view the declaratory relief made therein, and further what has been stated therein cannot be regarded as a binding precedent for the proposition that in a case of removal or dismissal or termination, a subsequently appointed employee is a necessary party. The said principle shall apply on all fours to a fair price shop owner whose licence is cancelled. We may hasten to add, this concept will stand in contradistinction to a case where the land after having vested under any statute in the State have been distributed and possession handed over to different landless persons. It is because of such allotment and delivery of possession in their favour, that is required under the statute rights are created in favour of such allottees and, therefore, they are necessary 54 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 parties as has been held in Ram Swarup & Ors. Vs. S.N. Maira & Ors. The subtle distinction has to be understood. It does not relate to a post or position which one holds in a fortuitous circumstance. It has nothing to do with a vacancy. The land of which possession is given and the landless persons who have received the Pattas and have remained in possession, they have a right to retain their possession. It will be an anarchical situation, if they are not impleaded as parties, whereas in a case which relates to a post or position or a vacancy, if he or she who holds the post because of the vacancy having arisen is allowed to be treated as a necessary party or allowed to assail the order, whereby the earlier post holder or allottee succeeds, it will only usher in the reverse situation - an anarchy in law.
51 and 52. xxx xxx xxx
53. We have referred to the said decision in extenso as there is emphasis on curtailment of legal right. The question to be posed is whether there is curtailment or extinction of a legal right of the appellant. The writ petitioner before the High Court was trying to establish her right in an independent manner, that is, she has an independent legal right. It is extremely difficult to hold that she has an independent legal right. It was the first allottee who could have continued in law, if his licence would not have been cancelled. He was entitled in law to prosecute his cause of action and restore his legal right.55 WP NO.21428 OF 2022
A/W WP NO.21433 OF 2022 Restoration of the legal right is pivotal and the prime mover. The eclipse being over, he has to come back to the same position. His right gets revived and that revival of the right cannot be dented by the third party."
20. The aforementioned judgment was reiterated by the Hon'ble Supreme Court recently in the case of RAM KUMAR (supra), wherein at paragraphs 12 to 14, it is observed thus:
"12. Insofar as the judgment of this Court in the case of Poonam (supra), on which strong reliance is placed by Mr. Irshad Ahmad, learned counsel, is concerned, this Court in the case of Pawan Chaubey (supra) had an occasion to consider the aforesaid judgment in the case of Poonam (supra). This Court in the case of Pawan Chaubey (supra) also noticed its earlier decision in the case of Sumitra Devi vs. State of U.P. & Ors. Noticing both these judgments, this Court observed thus:
"Our attention has been drawn to the judgment of this Court in Poonam vs. State of Uttar Pradesh & Ors. reported in (2016) 2 SCC 779. Relying on the aforesaid judgment, learned counsel appearing on behalf of the Respondent No.4 contended that the appellant need not be heard. She had no right or locus to be impleaded.
In Poonam (supra), the subsequent allottee had actually been heard at all stages. What the Court held was that the subsequent allottee had been trying to establish her right independently. She 56 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 contended that she had an independent legal right. This Court found that it was extremely difficult to hold that she had an independent legal right.
In Sumitra Devi vs. State of UP and Others (Civil Appeal Nos.9363-9364 of 2014), a Bench of coordinate strength of this Court comprising Hon'ble Ms. Justice Ranjana Prakash Desai and Hon'ble Mr. Justice N.V. Ramana (As His Lordship then was) passed an order dated 08.10.2014, the relevant parts whereof are extracted hereinbelow:
"The appellant being the subsequent allottee filed an application for impleadment in the writ petition on 17.10.2008. That application was neither entertained nor allowed."
xxx xxx xxx Learned counsel for the appellant urged and, in our opinion, rightly that the High Court should have heard the appellant before restoring the licence of respondent no.6 as the appellant was the subsequent allottee and his rights were affected by the restoration of licence of respondent no.6. We are entirely in agreement with learned counsel for the appellant. In our opinion, the High Court could not have restored the licence of respondent no.6 without hearing the appellant as his rights were certainly affected by such order."
Even if a subsequent allottee does not have an independent right, he/she still has a right to be heard and to make submissions defending the order of cancellation.
It is true that the order of appointment of the appellant reads that the order is subject to the outcome of the proceedings pending in court. This does not disqualify the appellant from appearing and contesting the proceedings by trying to show 57 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 that the order of cancellation had correctly been passed against the Respondent No.4."
13. It could thus be seen that this Court had held that, even if a subsequent allottee does not have an independent right, he/she still has a right to be heard and to make submissions defending the order of cancellation.
14. It is further to be noticed that in the said case, i.e., Pawan Chaubey (supra), the order of appointment of the appellant therein was subject to the outcome of the proceedings pending in court. The case at hand stands on a much better footing. The appellant herein had been selected by the Tehsil Level Selection Committee in its meeting dated 19th April 2018 and thereafter, he was appointed as Fair Price Dealer vide order of the Competent Authority dated 15th May 2018, on a regular basis."
21. Having taken note of the law declared by the Hon'ble Apex Court in the aforementioned judgments, I am of the view that the impleading applicants, who have been co-opted to respondent No.4-Union pursuant to the order dated 31st December, 2021 passed by the respondent No.3 and that apart, the impleading applicants being parties in Writ petition No.233 of 2022, are the necessary parties to these writ petitions. Though the learned Senior counsel appearing for the petitioners, 58 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 seriously contested the application filed by the impleading applicants referring to the aforementioned judgments that any order that may be passed in present writ petitions would not affect the right of the co-opted members whose co-option has been made in the place of the disqualified Director of the respondent No.5-Union, however, I find force in the submission made by Sri K. Diwakara, learned Senior Counsel appearing for the impleading applicant, to accept the application IA.I of 2022 and accordingly the same is allowed.
22. Insofar as Writ petition No.21433 of 2022 is concerned, petitioner being aggrieved by the order of disqualification, has preferred appeal before the respondent No.2 and the respondent No.2 by order dated 28th September, 2022, granted interim stay of the order dated 31st December, 2021.
However, by virtue of the order dated 18th October, 2022 (which is impugned in writ petition No.21428 of 2022), the interim stay dated 28th September, 2022 has no consequence.
23. In view of the observation made by this Court in Writ petition No.21428 of 2022 wherein it is held that the impugned 59 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 order passed by the respondent No.2 is without reasons and further, as the learned counsel appearing for the parties argued on the expeditious consideration of the Appeal No.DRS/APL/02/2022-23, the respondent No.2 is directed to complete the entire proceedings in the aforementioned appeal within three months from today, after affording opportunity of hearing to all the persons concerned in the matter and pass appropriate orders in accordance with law. Till such consideration of the Appeal by the respondent No.2, the order dated 28th September, 2022 staying the proceedings dated 31st December, 2021 passed by the respondent No.3 shall continue and the respondent No.2 shall permit the petitioner in Writ Petition No.21433 of 2022 to carry out his function, in accordance with law. For the aforestated reasons, I pass the following:
ORDER
i) Writ petitions are allowed;
ii) Order dated 18th October, 2022 (Annexure-F) impugned in Writ petition No.21428 of 2022 60 WP NO.21428 OF 2022 A/W WP NO.21433 OF 2022 is set aside and the respondent No.2-Deputy Registrar of Co-operative Societies, Shivamogga, is directed to conclude the appeal proceedings within three months from today;
iii) Since the impleading applications are the necessary parties for effective adjudication of the matter, liberty is reserved to the impleading applicants to come on record in the appeal proceedings before the respondent No.2 and if such application is filed by the impleading applicants, respondent No.2 shall consider the same and opportunity of hearing be extended to the impleading applicants also while considering the appeal on merits;
iv) In view of disposal of writ petitions, pending applications, if any, stand disposed of.
SD/-
JUDGE lnn