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Ranka Senior Advocate

1. Introduction The principles of natural justice are supposed to be as old as Adam and Eve. When Adam disobeyed God by eating the forbidden fruit from the tree of knowledge, God did not punish Adam without giving him an opportunity. It is said, God called him and asked him "Hast thou eaten of the tree where I commanded thee that thou should not eat?" There are innumerable facets of natural justice. Suffice to say the law has been developed in the twentieth century by many historical decisions. In ordinary parlance it means such principles which govern the justice to be done in natural manner or principles which are adhered to when justice is done by the nature. In statutes, such principles are specifically provided and even if unprovided, are read into a statute, to save it from the vice of arbitrariness, unequality, unfairness and bad conscience. Such principles are inherent and back bone of the judicial system as well as administrative, quasi-judicial or disciplinary action. It is rather the soul of an order or judgment. Where the statute itself provides for a particular form of opportunity, it has to be strictly followed, else in a manner well defined by the judgements and the precedents. It is trite, justice not only should be done, it should appear to have been done, to avoid criticism, doubt and suspicion. 2. Basic principles It is difficult to precisely define what is meant by natural justice, the contents of principles of natural justice are quite easy to enumerate. As it stands today, the basic principles of natural justice are : (i) that the parties should be heard before deciding an issue; (ii) the hearing must be before an impartial Judge, as no man can be judge of his own cause. Therefore, the hearing must be before an unbiased Judge; (iii) the Judge should decide in good faith. He should have no bias, personal or pecuniary; and (iv) the decision given must be reasoned one and therefore, the decision must be evidenced by a speaking order which enumerates the reasons for coming to a particular conclusion. The American Due Process of Law postulates : (a) notice (b) opportunity to be heard; (c) an impartial tribunal and (d) an orderly course of procedure. The concept of speaking order as a part of principles of natural justice is a significant and important contribution by Indian jurisprudence. The three basic accepted principles of natural justice are : that the dispute should be decided by an impartial judge without any bias or interest against the parties and in the subject-matter of dispute; audi alteram partem which means, no man should be condemned unheard. Both parties must be heard before passing any order; that the decisions must be reasoned one and the orders containing the decision must be speaking orders.

The essential characteristic of Natural Justice is put by Romans in two maxims, namely, (1) Nemo judex in causa sua (No man can be judge in his own cause); (2) Audi alteram partem (No man shall be condemned unheard). This may be put in two words Impartiality and Fairness. The concept of natural justice is comprised of many colours and shades and many forms and shapes, it is easy to proclaim, but very difficult to define. No doubt, it is true that the concept of natural justice is not very clear and, therefore, it is not possible to define it; yet the principles of natural justice are universally accepted and enforced. Article 14 of the Constitution of India contains a guarantee of equality before the law to all persons and a protection to them against discrimination by any law. What Article 14 forbids is discrimination by law, that is, treating persons similarly circumstanced differently or treating those not similarly circumstanced in the same way, or, as has been pithily put treating equals as un equals and un equals as equals. Article 14 prohibits hostile classification by law and is directed against discriminatory class legislation. Arbitrariness can take many forms and shapes but whatever form or shape it takes, it is nonetheless discrimination. It also became apparent that to treat a person or a class of persons unfairly would be an arbitrary act amounting to discrimination for- bidden by Article 14. The Apex Court has recognised that to treat a person in violation of the principles of natural justice would amount to arbitrary and discriminatory treatment and would violate the guarantee given by Article 14. The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by the Supreme Court to the concept of equality. Violation of a rule of natural justice results in arbitrariness which is the same as discrimination; where discrimination is the result of State action, it is a violation of Article 14 : therefore, a violation of a principle of natural justice by a State action is a violation of Article 14. The two rules of natural justice, namely, nemo judex in causa sua and audi alteram partem, have now a definite meaning and connotation in law and their content and implications are well understood and firmly established, they are nonetheless not statutory rules. Each of these rules yields to and changes with the exigencies of different situations. They do not apply in the same manner to situations which are not alike. These rules are not cast in a rigid mould nor can they be put in a legal strait-jacket. They are not immutable but flexible. These rules can be adapted and modified by statutes and statutory rules and also by the constitution of the Tribunal which has to decide a particular matter and the rules by which such Tribunal is governed. The Honble Supreme Court in Kraipak vs. Union of India AIR 1970 S.C. 150 observed : "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law but supplement it. It is true that if a statutory provisions can be read consistently with the principles of natural justice, the courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But if on the other hand a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice

then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power". 3. Provisions statutory and inherent Over years, invariably in every statute, provision relating to natural justice, by way of affording an opportunity of being heard, are inserted to save from arbitrariness. The concept of due process of law is sought to be brought under the purview of Article 21 of the Constitution of India. Article 10 of the universal declaration of human rights adopted by the General assembly of United Nations provide that every one is entitled to full equity to a fair and to the hearing by an independent and impartial Tribunal in the determination of his rights and obligations and of any criminal charge against him. Such principles are statutory in many statutes. However, where there is no specific provision, it has to be implied and such principles being inherent have to be complied with. Such principles have to be read in, even though not enacted. The Supreme Court in celebrated case of Maneka Gandhi vs. Union of India, AIR 1978 Supreme Court 597 observed that although there are no positive words in the Passport Act, 1967 requiring the applicant to be heard, yet the justice of the common law will supply the omission of the legislature. The principle of audi alteram partem, which mandates that no one shall be condemned unheard, is part of the rules of natural justice. Natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the year it has grown into a widely pervasive rule affecting large areas of administrative action. The inquiry must, always be, does fairness in action demand that an opportunity to be heard should be given to the person affected? It also observed that law must have been be taken to be well settled that even in a administrative proceeding, which involves Civil consequences, the doctrine of natural justice must be held to be applicable. It would not be right to conclude that the audi alteram partem rule is excluded merely because the power to impound a passport might be frustrated, if prior notice and hearing were to be given to the person concerned before impounding his passport. A fair opportunity of being heard following immediately upon the order impounding the passport would satisfy the mandate of natural justice and a provision requiring giving of such opportunity to the person concerned can and should be read by implication in the Passports Act, 1967. If such a provision were held to be incorporated in the Passports Act, 1967 by necessary implication, the procedure prescribed by the Act for impounding a passport would be right, fair and just and it would not suffer from the vice of arbitrariness or unreasonableness. The Supreme Court in Swadeshi Cotton Mills etc. vs. Union of India, AIR 1981 Supreme Court 818 stated: "The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional stage. Conversely, if the statute conferring the power is silent with regard to

the giving of a predecisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing shorn of all its formal trappings and dilatory features at the predecisional state, unless, viewed pragmatically, it would paralyse, the administrative process or frustrate the need for utmost promptitude. In short, this rule of fairplay must not be jettisoned save in every exceptional circumstances where compulsive necessity so demands. The court must make every effort to salvage this cardinal rule to the maximum extent possible with situational modifications. But the core of it must, however, remain, namely that the person affected must have reasonable opportunity of being hearing and not an empty public relations exercise Provision of Chapter XXC in the Income-tax Act 1961 do not provide an opportunity to be heard to be given before order for purchase as also do not provide to disclose reasons recorded to effected parties on challenge as to provisions being violative of Article 14 of the Constitution. The Honble Supreme Court in classic case of C.B. Gautam vs. Union of India (1993) 199 ITR 530 observed that the requirement of a reasonable opportunity being given to the concerned parties, particularly, the intending purchaser and the intending seller must be read into the provisions of Chapter XXC. In our opinion, before an order of compulsory purchase is made under section 269UD the intending purchaser and the intending seller must be given a reasonable opportunity of showing case against an order for compulsory purchase being made by the appropriate authority concerned. It also observed that if such a requirement were not read into the provisions of the said chapter, they would be seriously open to challenge on the ground of violation of the provisions of Article 14 on the ground of non compliance with the principles of natural justice. It stated that requirement of recording the reasons in writing is no substitute for a provision requiring a reasonable opportunity of being heard before such an order is made. The Madras High Court in Vijay Hemant Finance and Estates Ltd. vs. ITO (1999) 238 ITR 282 stated "Unless the provisions of the statute warrant or there is a necessary implication on reading of the section that the principles of natural justice are excluded, the provisions of the section should be construed in a manner incorporating the principles of natural justice. Courts should generally read into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being heard before an order is made which could have adverse civil consequences for the parties affected. It relied on the Supreme Court decision in K. P. Varghese vs. ITO (1981) 131 ITR 597 wherein the Honble Apex Court observed that the Court can read into the st atutory provision a condition which, though not expressed is implicit as constituting the basic ambition underlying the statutory provision. The Madras High Court granted an opportunity for rectification for defects in the declaration to make the provision reasonable and justified and to avoid hardship and unjust result. It also referred to the decision of Bombay High Court in the case of Dattatriya Gopal Sheety vs. CIT (1984) 150 ITR 464 where the Honble Bombay high Court was pleased to require to give an opportunity to the assessee to rectify the defects in the application filed for renewal of registration of the firm.

4. Rule of audi alteram partem Both parties should be heard before any decision. The right to a fair hearing has been used by the court as the base on which to build a kind of code for administrative procedure comparable with due process of law. A proper hearing must always include a fair and adequate opportunity to those who are parties in the controversy for correcting and contradicting anything prejudicial to their view. The disclosure of a charge or opposing case must be made and it must be made within reasonable time to allow the person affected to prepare his defence or his comments. He must have fair notice of any accusation against him. The principle of audi alteram partem has two aspects (i) notice and (ii) hearing (i) Notice Before any action is taken, the affected party should be given a notice to show cause against the proposed action and seek his explanation. Any order passed without giving notice is against the principles of natural justice. Accordingly, even if there is no provision in the statute about giving of notice, if the order in question adversely affects the rights on an individual, the notice must be given. The notice must be clear, specific and unambiguous and the charges should not be vague and uncertain. The object of notice is to give an opportunity to the individual concerned, to present his case. Moreover, the notice must give a reasonable opportunity to comply with the requirements mentioned thereon. Natural justice, therefore, requires that the person directly affected by the proposed acts, decisions or proceedings be given adequate notice of what is proposed so that he may be in a position, to make representation on his own behalf, or to appear at the hearing or inquiry (if any), and effectively to prepare his own case and to answer the case he has to meet.

Accordingly, the notice should be served in sufficient time to enable these representation to be made effectively. If an oral hearing is to be held, the time and the place must be properly noticed. If the charges are to be brought, they should be specified with particulars. (ii) Hearing The second requirement of audi alteram partem is that the person concerned must be given an opportunity of being heard before any adverse action is taken against him. A hearing will normally be an oral hearing. When an oral hearing is given the Tribunal must : Consider all relevant evidence which a party wishes to submit.

Inform every party of all the evidence to be taken into account, whether derived from another party or independently. Allow witnesses to be questioned. Allow comments on evidence and arguments on the whole case. The right to call and to cross examine witnesses, as a general rule, is part of natural justice.

Wrongful refusal of an adjournment when reasonably requested, may amount to refusal of fair hearing. The parties are entitled to copies of statements recorded at its back, copies of reasons required to be statutorily recorded, copies of all material which has been collected at the back, is being referred and relied upon and considered, copies of reports if made as a base for making any addition or allegation as also copies of third party books, own books, records, details etc. collected to be used in the matter. The Madhya Pradesh High Court in Keveyam & Co. vs. G. S. Gaghel (2000) 119 STC 123 observed that failure to furnish report of Flying Squad as failure of natural justice. It observed that a person against whom adverse order is to be passed has to be given full opportunity of defending himself or for the purpose of showing cause or explaining the situation as to why such adverse orders should not be passed against him. On providing the copies of statements or the reports, the assessee is entitled to seek right of cross examination. The Supreme Court in State of Kerala vs. K. T. Shaduli Yusuff (1977) 39 Sales Tax Cases 478 observed "One of the rules which constitutes a part of the principles of natural justice is the rule of audi alteram partem which requires that no man should be condemned unheard. It is indeed a requirement of the duty to act fairly, which lies on all judicial authorities, and this duty has been extended also to the authorities holding administrative enquiries involving civil consequences or affecting rights of parties. This rule which requires an opportunity to be heard to be given to a person likely to be affected by a decision is also, like the genus of which it is a specie, not an inflexible rule having a fixed connotation. It has a variable content depending on the nature of the inquiry, the framework of the law under which it is held, the constitution of the authority holding the inquiry, the nature and character of the rights affected and the consequences flowing from the decision. It is, therefore, not possible to say that in every case the rule of audi alteram partem requires that a particular specified procedure is to be followed. It may be that in a given case the rule of audi alteram partem may import a requirement that witnesses whom statements are sought to be relied upon by the authority holding the inquiry should be permitted to be cross examined by the party affected while in some other case it may not. The procedure required to be adopted for giving an opportunity to a person to be heard must necessarily depend on the facts and circumstances of each case. It held that the usual mode recognised by law for proving a fact is by production of evidence, which includes oral evidence of witnesses, and that would include equally the right to cross examine witnesses examined by the authorities. The Supreme Court in Kishan Chand Chellaram vs. CIT (1980) 125 ITR 713 held that the evidence to be used against the assessee must be provide to the assessee and an opportunity to confront should have been given to an assessee and that the letter could not be used without providing its copy as also permitting to cross examine the Bank Manager.

Oral hearing Oral hearing is very much essential, apart from written submissions in response to show cause notice. Expression "may allow a reasonable opportunity of being heard" includes right for oral personal hearing. Unless and until, the assessee declines to avail of the right of personal hearing, his right of oral hearing cannot be stalled. The Tamil Nadu Taxation Special Tribunal in Vinayaga Spinning Mills vs. CTO (2000) 118 STC 504 while construing the aforesaid expression stated that it costs a duty to give a personal hearing where asked for, or not." The Andhra Pradesh High Court in Shri Venkataraman Manure Co. vs. Dy. Commissioner (1978) 42 STC 189 observed that giving personal hearing is not necessarily an ingredient of the principles of natural justice but it does not mean that no personal hearing should be given at all. In cases, the assessee asks for personal hearing the authority may give it. The Honble Court held that the Dy. Commissioner should have given a personal hearing to the assessee even though the assessee did not asked for it. It drew support from the decisions of the Supreme Court in Mineral Development Ltd. vs. State of Kerala AIR 1960, Supreme Court 488; Kapoor Singh vs. Union of India, AIR 1960 Supreme Court 493 and M. P. Industries Ltd. vs. Union of India AIR 1966 Supreme Court 671 where it has been held by the Supreme Court 671 where it has been held by the Supreme Court that first, giving personal hearing is not necessarily an ingredient of the principles of natural justice and secondly, where a personal hearing should be given or not should be decided on the facts of each case. The Tamil Nadu Taxation Special Tribunal (Full Bench) in Dy. Commissioner vs. T.V.L. Apshani Associates (2001) 122 STC 70 observed : "The words of being heard" would only denote representation either written or oral or both by the assessee. As per the Oxford Concise Dictionary, the meaning of the word, "heard" is given as "given audience". Therefore, it is argued that there is no question of not giving personal audience". It is further argued that the world "hear" and "heard" only means hearing a person either personally or over phone or through a radio message. Even accepting the above arguments of the learned counsel for the Revenue, we have to point out that the TNGST Act, 1959, does not recognise a hearing over the phone or through a radio message. Further, such a hearing is not known to law. "Hearing" in the legal parlance only means a "personal audience" or "oral hearing". It referred to the case of Rajam Off-set Printers vs. CTO (1995) 8 MTCR 55 of Madras High Court wherein Honble Mr. Justice Shiv Raj Patil as he was (now Honble Judge of Supreme Court) has held that wherever the law uses the words "an opportunity of being heard", it has to be held that a personal hearing should have been given. The Full Bench of Patna High Court in CWT vs. Sh. Jagdish Prasad Choudary (1995) 211 ITR observed that legislative intent behind giving reasonable opportunity of hearing means a reasonable opportunity of oral hearing. It stated "having regard to the development of the principles of natural justice as well as the dynamic interpretation of Article 14 of the Constitution, it is no longer open to the authorities to decide the liability of penalty of an assessee

merely on the basis of consideration of a written representation given by the assessee and he must offer the assessee an opportunity of oral hearing. The Madhya Pradesh High Court in Acme Fabric Plast Co. vs. ITO (1997) 225 ITR 826 held that even though the petitioner had taken precautions to file written submissions this was not enough to assume that oral hearing is not required to be given and this has definitely prejudiced the case of the petitioner. It also stated that non grant of oral hearing cannot be cured by affording hearing at appeal stage as held in Ram Chandran vs. Union of India AIR 1986 Supreme Court 1173 at 1182 : "In principle, there ought to be an observance of natural justice called equally at both stages ....... If natural justice is violated at the first stage, the right of appeal is not so much a true right of appeal as a corrected initial hearing, instead of fair trial followed by appeal, the procedure is reduced to unfair trial followed by fair trial." Assistance by authorised representative Section 30 of the Advocates Act 1961 entitled every Advocate whose name is entered in the State Roll, as of right, to practice throughout the territories of India in all Courts including the Supreme Court, before any Tribunal or person legally authorised to take evidence and before any other authority or person before whom such Advocate is or under any law for the time being inforce entitled to practise. Section 288 (1) of the Income-tax Act provides that any assessee, who is entitled or required to attend before any Income tax Authority or the Appellate Tribunal in connection with any proceedings under the Act, otherwise than when required under section 131 to attend personally for examination on oath or affirmation, may subject to the other provisions of section 288 attend by an authorised representative. A question arises as to whether a person called upon to appear in person for recording of statement before any authority, can seek assistance by an Advocate or his authorised representative? Recording of statements u/s. 131 is a judicial proceeding, similar to that of a Civil Court under the code of Civil Procedure. Statements so recorded are admissible in evidence, can be used against him and in case any falsity is noticed the person is liable to prosecution and such statements may inflict Civil liability as well as may implied in criminal action. There cannot be two opinions on the issue that when any statement is required to be recorded or one is required to be cross examined, such person needs an assistance of a technically qualified person, in whom he can repose confidence, seek strength and in whose company he feels to be safe and peaceful. The Supreme Court had held in Smt. Nandani Satpathy vs. P. L. Dani AIR 1978 Supreme Court 1025 that lawyers presence is a constitutional claim in some circumstances in our country also and in the context of Article 20(3) an assurance of awareness and observance of the right to silence .... We think that Article 20(3) and Article 22 (1) may in where, be telescoped by making it prudent for the police to permit the Advocate of the accused, if there one be present at the time he is examined. The Delhi High Court in the case of K. T. Advani vs. The State New Delhi in 1985 Cr. Law Journal 1325 held that to deny a suspect the right to consult counsel and to the presence of counsel at the time of interrogation would be anti thesis of a just, fair and reasonable procedure. The Bombay High Court in Abdul Rajak Haji Mohd. vs. Union of India (1986) 10 ECC 236 held that one is entitled to the presence of his Advocate during interrogation u/s 40 of the Foreign Exchange Regulation Act. However, the Supreme Court in Pool Pandi vs. Supdt. Central Excise (1992) 75 Company cases 504 held that person who is interrogated by the Enforcement Directorate in investigation or by the Customs Authorities, is not a person accused of an offence within the meaning of Article 20(3) of the Constitution and is not entitled to the presence or

assistance of his lawyer during the questioning. In the light of the said judgment, an assessee cannot seek assistance of an Advocate or a Chartered Accountant or an authorised representative at the time of recording of his statement during survey of search proceedings. However, one is entitled while recording statements u/s 131 of the Income-tax Act, 1961. The Bombay High Court in Babu Rao Vishwanath Mathpati vs. State of Maharashtra AIR 1996 Bombay 227 have discussed principles of natural justice extensively. It observed "every person whose right has been affected must have reasonable notice of the case he has to meet. Furthermore, he must be furnished with the information upon which the action is based. The opportunity must be reasonable. What is reasonable however, depends on the facts and circumstances of each case and lastly, the documents which are necessary for effective exercise of foregoing right should not be withheld from such person. Moreover, where a party cannot meet the allegations against it for which it is asked to show cause and cannot properly meet those allegations with reference to the documents mentioned in the show cause notice it follows that the natural justice requires that the authority must furnish to the party the copies of those documents. No supply of such documents would obviously violate the principles of natural justice. Non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. It will come from a person who has denied justice that the person who has been denied justice is not prejudiced. It held that non supply of documents referred to in the show cause notice is violative of basic principles of natural justice. It also stated that it is one of the principles of natural justice that the explanations should be duly considered by the authorities and at least file will disclose as to why said explanation is not accepted or is not acceptable. 5. Nemo judex in causa sua The first maxim of natural justice Nemo Judex in Causa Sua is based on three principles, (i) no man shall be a judge in his own cause, (ii) justice should not only be done but manifestly and undoubtedly be seen to be done, (iii) judges, like Caesars wife should be above suspicion and, therefore, anything which lends or may be regarded as tending to cause such a person to decide a case otherwise than on evidence must be held to be biased. The word Bias has come to mean prejudice, show of favour or disfavour, antagonism, spite, hostility, prepossession that sways the mind. The bias which will violate the principles of natural justice may be of three types: (a) pecuniary bias, (b) personal bias, and (c) official bias or bias as to subject matter. It is well settled that as regard pecuniary interest, the least pecuniary interest in the subject matter of the litigation will disqualify any person from acting as a judge. The Supreme Court in Secretary to Government Transport Department vs. Munuswamy, 1988 (Suppl) SCC 651 (AIR 1988 SC 2232), held that a predisposition to decide for or against one party without proper regard to the true merits of the dispute is bias. Personal bias is one of the three major limbs of bias namely pecuniary bias, personal bias and official bias. A classic case of personal bias was revealed in the decisions of this Court in State of U.P.V. Mohd. Nooh, 1958 SCR 595 (AIR 1958 SC 86). In the said case, a departmental enquiry was held against an employee. One of the witnesses against the employee turned hostile. The officer holding the enquiry then left the enquiry, gave evidence against the employee and thereafter resumed to complete the enquiry and passed the order of dismissal. The

Honble Court quashed the order of dismissal after holding inter alia that the rules of natural justice were grievously violated. The Supreme Court in R. L. Sharma vs. Managing Committee AIR 1993 Supreme Court 2155 stated that if a person has a pecuniary interest, such interest, even if every small, disqualifies such person. For appreciating a case of personal bias or bias to the subject matter the test is whether there was a real likelihood of a bias even though such bias has not in fact taken place. The Honble High Court in Manak Lal vs. Dr. Prem Chand AIR 1957 Supreme Court 425 has laid down that the test is not whether in act, a bias has affected the judgment, the test always is and must be whether a litigant could reasonably apprehend that a bias attributable to a member of the Tribunal might have operated against him in the final decision of the Tribunal. It is in this sense that it is often said that justice must not only be done but must also appear to be done. The Supreme Court in International Airport Authority vs. K. D. Bali AIR 1988 Supreme Court 1099 observed "the purity of administration requires that the party to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party. But it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased. The apprehension must be judged from a healthy, reasonable and average point of view and not on mere apprehension of any whimsical person. The Bombay High Court in Babu Rao Vishwanath Mathpati vs. State of Maharashtra AIR 1996 Bombay 227 stated fairness must be observed even in the circumstances where natural justice is inapplicable. The object of fairness or fair play is to ensure that the vast power in the modern State is not for improper purpose or misguided by extraneous or irrelevant considerations and that the statutory authority arrives at a just or reasonable decision in affecting the rights of the person. The Supreme Court in Ashok Kumar Yadav vs. State of Haryana AIR 1987 SC 454 observed "It is one of the fundamental principles of our jurisprudence that no man can be a judge in his own cause and that if there is a reasonable likelihood of bias it is in accordance with natural justice and commonsense that the justice likely to be so biased should be incapacitated from sitting. The question is not whether the judge is actually biased or in fact decides partially, but whether there is real likelihood of bias. What is objectionable in such a case is not that the decision is actually tainted with bias but that the Circumstances are such as to create a reasonable apprehension in the mind of others that there is a likelihood of bias affecting the decision. The basic principle underlying this rule is that justice must not only be done but must also appear to be done. It is also important to note that this rule is not confined to cases where judicial power stricto sensu is exercised. It is appropriately extended to all cases where an independent mind has to be applied to arrive at a fair and just decision between the rival claims of parties. Justice is not the function of the courts alone, it is also the duty of all those who are expected to decide fairly between contending parties. The strict standards applied to authorities exercising judicial power are being increasingly applied to administrative bodies of it is vital to the maintenance of the rule of law in a welfare state where the jurisdiction of administrative bodies is increasing at a rapid pace that the instrumentalities of the state should discharge their functions in a fair and just manner. 6. Speaking and reasoned order

An order should be speaking, should contain detailed recording of evidence for and against, explanation of both sides, arguments raised by both sides and the reasons for arriving at a particular view. A reasoned and speaking order is bedrock of justice whether or not an appeal or revision lies against it. The Supreme Court in the Siemens Engineering & Manufacturing Co. vs. UOI AIR 1976 SC 1785 stated: "It is now well 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 and the order must be supported by reasons. The Supreme Court in S. N. Mukherjee vs. UOI AIR 1990 Supreme Court in 1984 observed: "The recording of reasons by an administrative authority serves a salutary purpose, namely it excludes chances of arbitrariness and assures 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. Therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It is however 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 state, the appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge. The Supreme Court in State of West Bengal vs. Atul Krishna Shaw, 1990 SC 2205 stated "giving of reasons is an essential element of administration of justice. A right to reason is, therefore, an indispensable part of sound system of judicial review. Reasoned decision is not only for the purpose of showing that the citizen is receiving justice but also a valid discipline for the Tribunal itself. Therefore, statement of reasons is one of the essentials of justice." It stated that the order should be a speaking order. The Supreme Court in Kishan Lal vs. UOI observed that even though in section 220(2A) of the IT Act it is not stated that any reasons are to be recorded in the order deciding such an application, it is implicit in the said provision that whenever such an application is filed the same should be decided by a speaking order. The principles of natural justice in this regard would be clearly applicable. A decision which is taken by the authority under section 220 (2A) can be subjected to judicial review, by filing a petition under Article 226 of the Constitution. This being so and where the decision of the application may have repercussion with regard to the amount of interest which an assessee is required to pay, it would be imperative that some reasons are given by the authority while disposing of the application. The matter was restored to the file of the Chief Commissioner to decide in accordance with law. 7. Violation of principles Any order made in violation of principles of natural justice is void ab-initio and is liable to be annulled and cancelled. The Supreme Court in Nawabkhan Abbaskhan vs. State of Gujarat AIR

1974 SC 1471 held that an order which infringes a fundamental freedom passed in violation of the audi alteram partem rule is a nullity. When a competent court holds such official act or order invalid or sets it aside, it operates from nativity, i.e. the impugned act or order was never valid. Where any proceedings are lawfully initiated and the authority has jurisdiction and validly initiate certain proceedings, if any illegality on account of violation of principles of natural justice is committed, the matter deserves to be restored to that initial stage, where the illegality was supervened as held by the Supreme Court in Guduthur Brothers vs. ITO (1960) 40 ITR 298. In the said case the Honble Supreme Court held that the show cause why penalty should not be imposed did not seize to be operative and proceedings can continue from the stage that which the illegality has occurred. Reliance can also be placed in this connection upon the judgment of the Supreme Court in the case of CIT vs. Electro House (1971) 82 ITR 824. The Bombay High Court in CIT vs. Bharat Kumar Modi (2000) 164 CTR 273 observed that an irregularity in the exercise of jurisdiction cannot result in annulment of the entire assessment proceedings. There is no case of lack of jurisdiction. It also observed that lack of opportunity to the assessee is an irregularity which affects the legality of the order but is does not affect jurisdiction and hence the Appellate authority was right in only setting aside and remanding the matter back with specific directions. The order need not be annulled. The Honble Supreme Court in Supdt. of Excise vs. Pratap Rai (1978) 114 STR 231 and CIT vs. National Taj Traders (1979) 121 ITR 535 held that the order passed in violation of natural justice, though void, it does not affect the jurisdiction otherwise vest in such authority and in exercise of such authority it can pass fresh orders. The Honble Court also held that the limitation to pass would be applicable only by passing the original order and not by passing afresh order in pursuance of the order setting aside the original order. Same view have been expressed by the Supreme Court in Kapoor Chand vs. CIT (1981) 131 ITR 451. 8. Conclusion Principles of natural justice are soul of an administration of justice and need to be adhered to in order to make the order as a just and fair order. Above stated principles are well settled and need to be complied by all Courts, authorities and Tribunals while dispensation of justice. It is a duty and obligation and its violation is infringement of fundamental rights conferred by the Constitution of India and shall also make mockery of law, which is impermissible in democracy.

There is a good deal of misconception on the question of the right of cross-examination as part of natural justice. Natural justice is fast becoming the most unnatural and artificial justice and for

this confusion the courts are no less responsible than the litigants. Ordinarily, the principle of natural justice is that: (i) No man shall be a judge in his own cause and (ii) No man shall be condemned unheard. This latter doctrine is known as audi alteram partem. It is on this principle that natural justice ensures that both sides should be heard fairly and reasonably. A part of this principle is that if any reliance is placed on evidence or record against a person then that evidence or record must be placed before him for his information, comment and criticism. This is all that is meant by the doctrine of audi alteram partem (no party should be condemned unheard). No natural justice requires that there should be a kind of a formal crossexamination. Formal cross-examination is procedural justice. It is governed by rules of evidence. It is the creation of courts and not a part of natural justice but legal and statutory justice. Natural justice certainly includes that before any statement of a person is accepted against somebody else, that somebody else should have an opportunity of meeting it, whether by way of interrogation or by way of comment. So long as the party charged has fair and reasonable opportunity to see, comment and criticise the evidence, statement or record on which the charge is being made against him, the demands and the test of natural justice are satisfied. Cross-examination in that sense is not the technical cross-examination in a court of law in the witness box. The judicial climate on this point is thickly clothed with many decisions. The result is that the danger of confusion has become real and natural justice is on the misleading road of sentimental potentialities. The case of Union of India v. T.R. Varma, A.I.R. 1957 SC. 882: 1958 S.C.A. 110 was a case of a departmental enquiry on the question of wrongful dismissal. There is express provision in Rule 55 of the Fundamental Rules giving the aggrieved party the rights to cross- examine. For instance Rule 55 inter alia says: At the enquiry, oral evidence shall be heard as to such of the allegations as are not admitted, and the person charged shall be entitled to cross-examine the witnesses. It was observed in this case: A stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence, that he should be given the opportunity of cross-examining, the witnesses examined by that party and

that no materials should be relied on against him without his being given an opportunity of explaining them. If these rules are satisfied, the enquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking evidence was not strictly followed. The case of State of Madhya Pradesh v. Chintaman Sadashiva, A.I.R. 1961 S.C. 1623: Jab. L.J. 702, was also a case of disciplinary proceedings in respect of the dismissal of public servant. It repeated the principles laid down in A.I.R. 1957 S.C. 882. The case of State of Mysore v. Shivabasappa Shivappa, AIR 1963 SC 375: (1963) 2 SCR 943, was also a case of a departmental enquiry and related to the rules of service. It also followed AIR 1957 SC 882, but it was observed: For a correct appreciation of the position, it is necessary to repeat what has often been said that tribunals exercising quasi-judicial functions are not courts and that, therefore, they are not bound to follow the procedure prescribed for trial of actions in courts nor are they bound by strict rules of evidence. They can, unlike courts, obtain all information material for the points under enquiry from all sources and through all channels, without being fettered by rules of procedure which govern proceedings in court. The only obligation which the law casts on them is that they should not act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain it. What is a fair opportunity depends on the facts and circumstances of each case but where such an opportunity had been given, the proceedings are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in courts. In conclusion, all that can be said is that natural justice must not be strained to become artificial justice. Procedural justice, according to statutes or under statutory rules, is different from the concepts of natural justice. There the procedure under the statute or the Rules must govern. If the Collector of Customs were to convey himself to a regular court of law hearing formal cross-examination and applying the Evidence Act and the Civil and Criminal Procedure Codes in this manner as a court of law, then, of course, it will be physically and literally impossible for him to function as the Collector of Customs. In a Calcutta case, it was observed: The principle that no man should be condemned unheard, is a principle which cannot be exhaustively defined.

It embraces a wide range of situations in which acts or decisions have civil consequences for individuals by directly affecting their legitimate interests or expectations. In a given context, the presumption in favour of importing the rule might be partly or wholly displaced: (a) Where compliance with the rule would be inconsistent with a paramount need for taking urgent preventive or remedial action, or (b) Where a disclosure of confidential but relevant information to an interested party would be materially prejudicial to(i) The public interest, or (ii) The interests of other persons, or (c) Where it was impracticable to give prior notice of hearing, or (d) Where, in some cases, the Parliament has evinced an intention to exclude the operation of the rule(i) By conferring on the competent authority unfettered discretionary power, or (ii) By expressly providing for notice or an opportunity to be heard for one purpose but omitting to make any such provision for another kindred purpose. Where, however, a general duty to act judicially was cast on the competent authority only clear language would be interpreted as conferring the power to exclude the operation of the rule. The contention as to the impugned Notification, issued by the Joint Textile Commissioner in exercise of the powers conferred on him under Clause 20 of the Cotton Textiles (Control) Order of 1948, being violative of the principles of natural justice, has no substance. It is well settled that the question of giving hearing to a class of persons does not arise where the Government is required to do something to implement its policies. Policy decisions of the Government fall in different class altogether and are distinct from the administrative order of the Government affecting the citizens of the country.

Principle of Natural Justice

Audi Alteram Partem Sarungbam Lucy Principle of natural justice is based on the two legal maxims Nemo debet essa judex in propria cause which means no one can be judge of his own cause. Audi Alteram Partem which means opportunity of fair hearing to the other side must be afforded. This is a rule which generally applies in disciplinary proceedings against an employee charge of misconduct or any guilt. As per the rule of principle of natural justice, an enquiry into the allegation labelled against the employee must be initiated and a fair opportunity of bearing heard must be afforded to such employee. Thus this rule requires that: (1) charged employee should be given notice of the charges he is called upon to explain and the allegations on which those are based; (2) evidence should be taken in the presence of the charged employee; (3) he should be given opportunity to cross-examine the prosecution witnesses; (4) he should have the opportunity of adducing all relevant evidence on which he relies; (5) no material should be relied on against him without giving him an opportunity of explaining such material.

The first principle is that No man shall be a judge in his own cause i.e. to say, the deciding authority must be impartial and without bias. It implies that no man can act as a judge for a cause in which he himself has some interest, may be pecuniary or otherwise. Pecuniary interest affords the strongest proof against impartiality. The emphasis is on the objectivity in dealing with and deciding a matter. Justice Gajendragadkar, as then he was, observed in a case reported in AIR 1965 SC 1061, M/s Builders Supply Corporation v. The Union of India and others, it is obvious that pecuniary interest, however small it may be, in a subject matter of the proceedings, would wholly disqualify a member from acting as a judge. Lord Hardwick observed in one of the cases, In a matter of so tender a nature, even the appearance of evil is to be avoided. Yet it has been laid down as principle of law that pecuniary interest would disqualify a Judge to decide the matter even though it is not proved that the decision was in any way affected. This is thus a matter of faith, which a common man must have, in the deciding authority. Status in India As per the Constitution of India under Article 14, 19, 21 lay down the cornerstone of natural justice in India. In the case of E P Royappa v. State of Tamilnadu, the apex court held that a properly expressed and authenticated order can be challenged on the ground that condition precedent to the making of order has not been fulfilled or the principles of natural justice have

not been observed. In another landmark case of Maneka Gandhi v. Union of India , the apex court held that law which allows any administrative authority to take a decision affecting the rights of the people, without assigning the reason for such action, cannot be accepted as a procedure, which is just, fair and reasonable, hence violative of Articles 14 and 21. The Rules of Priciple of Natural Justice/ Audi Alteram Partem are as follows : 1.The Hearing Rule This rule requires that a person must be allowed an adequate opportunity to present their case where certain interests and rights may be adversely affected by a decision-maker. To ensure that these rights are respected, the deciding authority must give both the opportunity to prepare and present evidence and to respond to arguments presenting by the opposite side. When conducting an investigation in relation to a complaint it is important that the person being complained against is advised of the allegations in as much detail as possible and given the opportunity to reply to the allegations. 2. The Bias Rule This second rule states that no one ought to be judge in his or her case. This is the requirement that the deciding authority must be unbiased when according chk this spelling the hearing or making the decision. Additionally, investigators and decision-makers must act without bias in all procedures connected with the making of a decision. A decision-maker must be impartial and must make a decision based on a balanced and considered assessment of the information and evidence before him or her without favouring one party over another. Even where no actual bias exists, investigators and decision-makers should be careful to avoid the appearance of bias. Investigators should ensure that there is no conflict of interest which would make it inappropriate for them to conduct the investigation. 3. The Evidence Rule The third rule is that an administrative decision must be based upon logical proof or evidence material. Investigators and decision makers should not base their decisions on mere speculation or suspicion. Rather, an investigator or decision maker should be able to clearly point to the evidence on which the inference or determination is based. Evidence (arguments, allegations, documents,

photos, etc) presented by one party must be disclosed to the other party, who may then subject it to scrunity. 4. Audi Alteram Partem or Rule of Fair Hearing The principle of audi alteram partem is the basic concept of principle of natural justice. The expression audi alteram partem implies that a person must be given opportunity to defend himself. This principle is sine qua non of every civilized society. This rule covers various stages through which administrative adjudication passes starting from notice to final determination. Right to fair hearing thus includes:1. Right to notice 2. Right to present case and evidence 3. Right to rebut adverse evidence (i) Right to cross examination (ii) Right to legal representation 4. Disclosure of evidence to party 5. Report of enquiry to be shown to the other party 6. Reasoned decisions or speaking orders 5.Post Decisional Hearing Post decisional hearing means hearing after the decision is reached. The idea of post decisional hearing has been developed by the SC in Maneka Gandhi Vs. UOI to maintain the balance between administrative efficiency and fairness to the individual. Maneka Gandhi Vs. Union of India Facts : In this case the passport dated 01.06.1976 of the petitioner, a journalist, was impounded Rsin the public interest by an order dated 02.07.1977. The Govt. declined to furnish her the reasons for its decision. She filed a petition before the SC under article 32 challenging the validity of the impoundment order. She was also not given any pre-decisional notice and hearing. Argument by the Govt. The Govt. argued that the rule of audi alteram partem must be held to be excluded because otherwise it would have frustrated the very purpose of impounding the passport. However the

Supreme Court held that though the impoundment of the passport was an administrative action yet the rule of fair hearing is attracted by the necessary implication and it would not be fair to exclude the application of this cardinal rule on the ground of administrative convenience. The court did not outright quash the order and allowed the return of the passport because of the special socio-political factors attending the case. The technique of post decisional hearing was developed in order to balance these factors against the requirements of law, justice and fairness. The court stressed that a fair opportunity of being heard following immediately the order impounding the passport would satisfy the mandate of natural justice. The court validated the order of the govt. which had been passed in violation of the rule of audi alteram partem because the govt. had agreed to give post-decisional hearing. The ratio of the majority decision was as follows: 1. Pre-decisional hearing may be dispensed with in an emergent situation where immediate action is required to prevent some imminent danger or injury or hazard to paramount public interest. 2. Mere urgency is, however, no reason for exclusion of audi alteram partem rule. The decision to exclude pre-decisional hearing would be justiciable. 3. Where pre-decisional hearing is dispensed with, there must be a provision for post-decisional remedial hearing. . In H.L.Trehan Vs. UOI, a circular was issued by the Govt. on taking over the company prejudicially altering the terms and conditions of its employees w/o affording an opportunity of hearing to them. The SC observed that In our opinion, the post decisional opportunity of hearing does not subserve the rules of natural justice. The authority who embarks upon a postdecisional hearing will normally proceed with a closed mind and there is hardly any chance of getting proper consideration of the representation at such a post decisional hearing. Thus in every case where pre-decisional hearing is warranted, post-decisional hearing will not validate the action except in very exceptional circumstances. Pre-decisional hearing is the standard norm of rule of audi alteram partem. But post-decisional hearing atleast affords an opportunity to the aggrieved person and is better than no hearing at all. However, post-decisional hearing should be an exception rather than rule. It is acceptable in the following situations:_ 1. where the original decision does not cause any prejudice or detriment to the person affected; 2. where there is urgent need for prompt action; 3. where it is impracticable to afford pre-decisional hearing. The decision of excluding pre-decisional hearing is justiciable.

6. Requirement of Cross Examination Cross-examination is used to rebut evidence or elicit and establish truth. In administrative adjudication, as a general rule, the courts do not insist on cross-examination unless the circumstances are such that in the absence of it, an effective defence cannot be put up. The SC disallowed cross-examination in State of J&K vs. Bakshi Gulam Mohammedon the ground that the evidence of witness was in the form of affidavits and the copies had been made available to the party. Where, however, witnesses depose orally before the authority, the refusal to allow cross examination would certainly amount to violation of principles of natural justice. It can thus be concluded that right to cross-examine is an important part of the principle of fair hearing but whether the same should be allowed in administrative matters mainly depends on the facts and circumstances of the case.