Bangalore Medical Trust vs B.S. Muddappa And Ors on 19 July, 1991
(ii) While considering, a litigation arising out of Bangalore Development
Authority Act, 1976, the Supreme Court in Bangalore Medical Trust v.
B.S.Muddappa and others, reported in (1991) 4 SCC 54, held that
"Discretion is an effective tool in administration. It provides an opinion
to the authority concerned to adopt one or the other alternative. But a better,
proper and legal exercise of discretion is one where the authority examines the
fact, is aware of law and then decides objectively and rationally what serves
the interest better. When a statute either provides guidance or rules or
regulations are framed for exercise of discretion then the action should be in
accordance with it. Even where statutes are silent and only power is conferred
to act in one or the other manner, the Authority cannot act whimsically or
arbitrarily. It should be guided by reasonableness and fairness. The
legislature never intends its authority to abuse the law or use it unfairly.
Where the law requires an authority to act or decide, 'if it is appears to it
necessary' or if he is 'of opinion that a particular act should be done' then it
is implicit that it should be done objectively, fairly and reasonably. In a
democratic set up the people or community being sovereign the exercise of
discretion must be guided by the inherent philosophy that the exerciser of
discretion is accountable for his action. It is to be tested on anvil of rule of
law and fairness or justice particularly if competing interests of members of
society is involved. Decisions affecting public interest or the necessity of
doing it in the light of guidance provided by the Act and rules may not require
intimation to person affected yet the exercise of discretion is vitiated if the
action is bereft of rationality, lacks objective and purposive approach. Public
interest or general good or social betterment have no doubt priority over
private or individual interest but it must not be a pretext to justify the
arbitrary or illegal exercise of power. It must withstand scrutiny of the
legislative standard provided by the statute itself. The authority exercising
discretion must not appear to be impervious to legislative directions. The
action or decision must not only be reached reasonably and intelligibly but it
must be related to the purpose for which power is exercised."