# BHAGAT RAJA v. THE UNION OF INDIA & ORS

- **Citation:** [1967] 3 S.C.R. 302
- **Court:** Supreme Court of India
- **Decided:** 1967-03-29
- **Bench:** K. Subba Rao, J. C. Shah, J. M. Shelat, V. Bhargava, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bhagat-raja-v-the-union-of-india-ors-4050
- **Pages:** 20

## Headnote

Mines & Minerals (Regulation and Dev.elapme11t) Act, 1957, s. 30
and Rules 54 & 55 1nade under the Act--State Governnient's
order
refusing mining lease to one party and granting it 'to another-Central
Governnient whether in deciding revision under r. 55 should pass 'speaking order.
The appellant was one of several applicants for a mmmg lease
in
Andhra Pradesh.
The State Government however granted it to respondent No. 3.
The appellant then filed an application in revision, under
s. 30 of the Mines & Minerals (Regulation and Development) Act, 1957,
read with r. 54, to the Union of India.
Respondent No. 3 filed
a
counter statement and the State Government filed its comments.
The
appellant filed a rejoinder. · The Union Government without hearing the
appellant rejected his revision application,
An appeal was filed before
this Court. The question that fell for consideration was whether it was
necessary for the Government of India to give reasons for its decision
in view of the provisions of the Act and the Rules or aliunde because
the decision was liable to be questioned in appeal to this Court.
HELD: (i) In exercising its powers ·of revision under r. SS
the
Central Government discharges fuiictioas which are quasi-judicial,
The
decisions of tribunals in India are subject to the supervisory powers of
the High Court under Art. 227 of the Constitution and
of appellate
powers of this court under Art. 136.
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

## Text

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BHAGAT RAJA
v.
THE UNION OF INDIA & ORS.
March 29, 1967
[K. SUBBA RAO, C.J., J. C. SHAH, J. M. SHELAT, V. BHARGAVA
AND G. K. MITTER, JJ.J
Mines & Minerals (Regulation and Dev.elapme11t) Act, 1957, s. 30
and Rules 54 & 55 1nade under the Act--State Governnient's
order
refusing mining lease to one party and granting it 'to another-Central
Governnient whether in deciding revision under r. 55 should pass 'speaking order.
The appellant was one of several applicants for a mmmg lease
in
Andhra Pradesh.
The State Government however granted it to respondent No. 3.
The appellant then filed an application in revision, under
s. 30 of the Mines & Minerals (Regulation and Development) Act, 1957,
read with r. 54, to the Union of India.
Respondent No. 3 filed
a
counter statement and the State Government filed its comments.
The
appellant filed a rejoinder. · The Union Government without hearing the
appellant rejected his revision application,
An appeal was filed before
this Court. The question that fell for consideration was whether it was
necessary for the Government of India to give reasons for its decision
in view of the provisions of the Act and the Rules or aliunde because
the decision was liable to be questioned in appeal to this Court.
HELD: (i) In exercising its powers ·of revision under r. SS
the
Central Government discharges fuiictioas which are quasi-judicial,
The
decisions of tribunals in India are subject to the supervisory powers of
the High Court under Art. 227 of the Constitution and
of appellate
powers of this court under Art. 136.
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
appellate jurisdiction ..,,atisfactorily by examining the entire records of the
case and after giving a hearing come to its conclusion on the merits of
the case. This would certainly be a very unsatisfactory method of dealing
with the appCal.
[308E-F; 309B-C]
If the State Government gives sufficient reasons for
accepting the
application of one party and rejecting that of others, as it must, and the
Central Government adopts the ·reasoning of the State Government, this
Court may proceed to examine whether the reasons given are sufficient
for the purpose of upholding the decision.
But when the reasons given
in the order of the State Government are scrappy or nebulous and the
Central Government
makes
no attempt
to clarify
the
same,
this
Court. in appeal
may
have
to examine the case de novo, without
anybody
being
the
wiser
for the review by
the Central Government.
The same difficulty would arise where the
State
Government
gives a number of reasons some of which are good and some are not and
the
Central Government
gives its decision
without specifying
those
reasons which according to it are sufficient to uphold the ord~r of the
State Govemn1ent.
That is why in such circumstances, what 1s known
as a 'speaking order' is called for.
[309C-FJ
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BHAGAT RAJA v. UNION (Mitter, J.)
303
A 'speaking order' is all the more necessary in the case of a decision
under r. 55 because there is provision for new material being placed
before the Central Government which was not there before the State
Government, and further, because the decision, affecting important rights
of parties, is given in a sui:imary manner without a hearing. ~eing allowed
to the parties.
A party IS entitled to know why the dec1S1on has gone
against him.
[320G-321B]
The absence in r. 55 of any provision for giving such reasons is not
decisive of the matter in view of the above considerations.
[315H]
Shivji Nathub/Jai v. The Union of India, [1960] 2 S.C.R. 775, M.P.
Industries v. Union, [1966] 1 S.C.R. 466, Harinagar Sugar Mills Ltd. v.
Shyam Sundar lhunjhunwala, (1962] 2 S.C.R. 339 and Sardar Govindrao
v. State, [1965] I S.C.R. 678, followed.
Nandram Hunatram, Calcutta v. Union of India, A.i.R. 1966 S.C.
1922 and Commissioner of Income-tax v. K. V. Pi//iah, 43 I.T.R. 411,
distinguished.
Rex v. Northumberland Compensation
Appeal
Tribunal
Ex flprte
Shaw, [1951] 1 K.B. 711, Vedachala Mudaliar v. State of Madras, AO.R.
1952 Madras 276, Ramayya v. State of Andhra, I.L.R. 1956 Andhra 712,
Annamalai v. State of Madras, A.I.R. 1957 Andhra Pradesh 738 and
Joseph v. Superintendent of Post
Officts, Kottayam,
J.L.R.
1961 II
Kerala 245, referred to.
CIVIL APPELLATE JURISDICTION ; Civil Appeals Nos. 2596
and 2597 of 1966.
Appeals by special leave from the Orders dated May 2, 1966
and June 22, 1966 of the Government of India, Ministry of
Mines and Metals, New Delhi on application is filed
by
the
appellant under Rule 54 of the Mineral Concession Rules, 1960.
S. J. Sorabji, A. J. Rana, J. R. Gagrat and B. R. Agarwal
for the appellant (in both the appeals).
'
G. N. Dikshit, R. N. Sachthey for S. P. Nayyar for respondent No. 1 (in both the ap~als).
'
P. Ram Reddy and B. Parthasarathy, for respondent No. 2 (in
both the appeals) .
M. C. Setalvad, B. Dutta, and 0. C. Mathur for respondent
No. 3 (in both the appeals).
'
The Judgment of the Court was delivered by
Milter, J.
These two appeals by special leave, are limited
to the question as to whether in dismissin_g a revision and confirming the order of the State of Andhra Pradesh the Union of
India was bound to make a speaking order. The text of the
order is the same in both the cases, the only difference being in
304
SUPREME COURT REPORTS
[1967] 3 S.C.R.
the situs and the area in respect of wh,ich tho lease was applied
for. One of the orders runs as follows :
"New Delhi, the 22nd June, 1966".
I am directed to refer to your revision application dated 14-12-1964 and letter dated 28-1-1966 on
the above subject and to say that after careful consideration of the grounds stated therein, the Central
Government have come to the conclusion that there is
~-
no valid ground for interfering with the decision of the
Government of Andhra Pradesh rejecting your application for grant of mining lease for asbestos over an area
of Ac.113-50 in Brahmanapalli
village,
Cuddapah
District, Andhra Pradesh.
Your application for revision is, therefore, rejected."
The facts leading to the two appeals are as follows : In response
to a notification dated January 8, 1964 published in the State
Gazette by the Andhra Pradesh Government inviting applications
under r. 5 8 of the rules framed under the Mines and Minerals
(Regulation and Development) Act, 1957 (hereinafter referred
to as the Rules and the Act) the appellant submitted two applications in the prescribed form viz., Form "I" for areas aggregating
Ac. 113-50 in village Brahmanapalli and Ac. 13-10 in village
lppatta both in the district of Cuddapah for mining asbestos. Res·
pondent No. 3 also made similar applications on the same date.
According to the appellant. his applications complied with all the
requirements of Form "I" while those of respondent No. 3 were
defective in some respects.
Besides the appellant and the respondent No. 3, there was only one other person who applied for a
prospecting licence which was rejected off-hand.
As between the
appellant and the respondent No. 3, the Government of Andhra
Pradesh preferred the latter.
The relevant portion of the order
dated 19th October 1964 in respect of the village Brahmanapalli
under s. 10(3) of the Act was as follows:
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"As between the other applicants Sri Bhagat Raja
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and M/s. Tiffin's Barytes, Asbestos and Paints Ltd.,
the Government prefer M/s. Tiffin's Barytes, ..... as
they are having adequate general experience and technical knowledge, and are old lessees in the district,
without any arrears of mineral dues to the Government.
The mining lease application of Sri Bhagat Raja for
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the areas covered by the mining lea1e application of
M/s. Tiffin's Barytes, Asbestos and Paints Ltd. is
rejected."
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BHAGAT RAJA v. UNION (Mitter, J.)
305·
The text of the order with regard to village Ippatta is practically
the 5ame.
The appellant filed application in revision in the prescribed
fonn i.e. Fonn 'N' under s. 30 of the Act read with r. 54 to the
Union of India on December 14, 1964. The appellant tried to.
bring out in his revision applications that the financial condition
of the 3rd respondent was extremely precarious as would be evidenced by documents, copies whereof were annexed to his petition.
The 3rd respondent filed a counter statement to
the
revmon application in April 1965. In March 1966 the appellant received the comments of the Andhra. Pradesh Government
on his revision applications.
The appellant filed rejoinder to
the counter statements of the 3rd respondent in May 1965 and
to the comments of the Andhra Pradesh Government in April
1966.
He also asked for the grant of a personal hearing
before the decision of the case which was not given. Ultimately,
his applications were rejected by· ord.ers quoted hereinabove.
Various grounds of appeal were taken in the application
for special leave to appeal preferred by the appellant.
An
attempt has been made therein to show that respondent No. 3
had no experience in asbestos mining, that its financial position
was very unsatisfactory and that its application for mining lease
was not in proper form.
A complamt was also made that in
rejecting the applicant's revision applications the Union of
India was bound to give reasons for its decision as it was exercising quasi .iudicial powers under s. 30 of the Act read with
tT. 54 and 55, that principles of natural justice and £airplay
requiring the divulgence of the grounds were violated and that
a personal hearing should have been given to the appellant before
the disposal of the revision applications.
We are not called upon in this case to go into the merits of
the case but only to examine the question as to whether it was
necessary for the Government of India to give reasons for its
decision in view of the provisions of the Act and the Rules or
aliunde because the decision was liable to be questioned in appeal
to this Court. It is necessary to take note of a few provisions of
the Act and the relevant rules framed thereunder to ascertain the
scope of a party's right to apply for a lease and the powers and
duties of the Government in accepting or rejecting the some. The
preamble to the Act shows that its object was to provide for the
regulation of mines and the development of minerals under the
control of the Union of India. Under s. 4( 1) no person can
undertake any prospecting or mining operations in any area,
except under and in accordance with the tenns and conditions of
a prospecting licence or a mining lease granted under the Act and
the Rules.
Under sub-s. (2) of the section
306
SUPREME COURT REPORTS
[1967] 3 s.c.R.
"No prospecting licence or mining lease shall be
granted otherwise than in accordance with the provisions of this Act and the rules made thereunder."
.S. 5 Jays dowp, certain conditions which a person desiring to
have a mining lease must fulfil.
S. 8 provides for
the period
for which a mining lease may be granted.
Under s. 10( 1) an
application for a mining lease has to be made to the State
Government concerned in the prescribed form.
Sub-s. (3) of
s. 10 runs as follows :
"On receipt of an application under this section,
the State Government may, having regard to the provisions of this Act and any rules made thereunder,
grant or refuse to grant the licence or lease."
Under sub-s. (2) of s. 11 a person whose application for
a
licence is received earlier than those of others shall have a preferential right for the grant thereof over the others. The proviso
to this sub-section enacts that where applications are received on
the same day, the State Government, after taking
into
consideration the matters specified in sub-s. ( 3), may grant the mining
lease to such one of the applicants as it may deem fit. Sub-s. ( 3)
specifies 4he matters referred to in sub-s. (2) and they are as
follows:-
(a) any special knowledge or experience in, prospecting operations or mining operations,
as the case
may be, possessed by the applicant;
(b) the financial resources of the applicant;
( c) the nature and quality of the technical staff
employed or to be employed by the applicant; and
( d) such other matters as may be prescribed.
·s. 13(1) enables the Central Government to make rules for
regulating the grant of prospecting licences and mining leases.
Under s.19 any mining lease granted, riinewed or acquired in
contravention of the provisions of the Act' is to be void and of
no effect. Power of revision of the order of the State Government is given to the Central Government in the following terms :
"The Central Government may, of its own motion
or on application made within the prescribed time by
the aggrieved party, revise any order made by a State
Government or other authority in exeip~se of
the
powers conferred on it by or under this Act."
Rules were made by the Central Government under s.13 of
the Act known as the Mineral Concession Rules, 19~0. R.22 pres-
-cribes that an application for the grant of a mining lease must
be made to the State Government in Form "I" accompanied by a
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DllAGAT RAJA V. UNION (Mille!', J.)
307
fee of Rs. 200/-, a deposit of Rs. 500/- and an
income-~
clearance certificate.
Under r. 26 the State Government
IS
obliged to give reasons for refusal to grant a mining lease. Any
person aggrieved by an order made by the State Government
may prefer an application for revision under r. 54 in Form 'N'. In
every such application against the order of the State Government refusing to grant a mining lease, a person to whom .a. lease
has been granted must be impleaded as a party. R. 55 onginally
framed in 1960 was amended in July 1965. Under the amended
r. 55 the position is as follows :-
" ( 1 ) On receipt of an application for
revision
under r. 54, copies thereof shall be sent to the State
Government and to all the impleaded parties calling
upon them to make such comments as they may like
to make within three months of the date of issue of the
communication and if no
comments
are
received
within that period, it is to be presumed that the party
omit.ting to make such comments has none to make.
( 2) On receipt of the comments 'from any party
under sub-rule ( 1), copies thereof have to be sent to
the other parties c,alling -upon them to niake further
comments as they may like to make within one month
from the date of the issue of the communication.
( 3) The revision application, the communications
containing comments and counter-comments
referred
to in sub-rules
(1)
and (2) shall constitute the
record of the case. .
( 4) After considering the records referred to in
sub-rule ( 3), the Central Government may confinn,
modify or set aside the order or pass such other order
in relation thereto as it may deem just and proper."
From t)le above, it will be amply clear that in exercising its
powers of revision under r. 55 the Central Government mu5t
take into i;:onsideration not only the material which was before
the State .Government but comments and counter-comments, if
any, which the parties may make rejlarding the order of the
State Government.
In other words, it is open to th.e pa1 ties to
show how and where the State Government had gone wrong,
or, why the order of the State Government should be confinned.
A party whose application for a mining lease is turned down by
the State Government is therefore given
an
opportunhy
of
showing that the State Government had taken into consideration
irrelevant matters or based its decision on grounds which were
not justified.
At the time when applications for a licence are
made by different parties to the State Government, they are not
LSSup/67-7
308
SUPREME COURT. REPORTS
[1967] 3 S.C.R.
giYen a~ opportunity of showing any defects or demelits in the
applications of the others or why their applications shuuld be
preferred to others.
The State Government has to make up its
~ind by considering the applicatlo115 before it as to which party
1s to be preferred to the other or others.
S.11 ( 3), as already
noted, prescribes the matters which the State Government must
consider before selecting one out of the numerc;ius
applicants.
But the po3sibility of the State Government being misled in its
consideration of the matters cannot be ruled out.
It may be
that a p~rty to whom a lease is directed to be granted has in fact
no spl?C1al kn~wledge or experi~nce requisite for
the mining
operations or 1t may be that hts financial resources have not
been properly disclosed.
It may also be that the nature and
quality of the technical staff employed or to be employed by him
is not of the requisite standard.
En an application for revision
under r. SS it will be open to an aggrieved party to contend that
:the matters covered by sub-s. (3) of s. 11 were not properly
examined by the State Government, or that the State Government had not before it all the available material fo make up its
mind with respect thereto before granting a licence. In a case
where complaints of this nature are made, of necessity, the Central
Government has to scrutinise matters which were not canvassed
before the State Government.
A question may arise in such cases
as to whether the order of the Central Government in the form in
which it was made in this case would be sufficient, specially in
view of the fact that the correctness thereof may be tested in
appeal to this Court.
It is now well-settled that in exercising its powers of revision
under r. S5 the Central Government discharges functions which
are quasi judicial : see Shivji Nathubhai v. The Union of India
& Ors.(') and M. P. Industries v. Union('). In the latter case one
of us (our present Chief Justice) said (at p. 471):
"The entire scheme of the rules posits
a judicial
procedure and the Central Government is constituted
as a tribunal to dispose of the said revision.
Indeed
this Court in Shivji Nathubhai v. The Union of I.n~ia
(supra) rules that the Central Government cxerc1s1ng
its power of review under r. 54 of the Mineral Concession Rules, 1949, was acting judicially as a tribunal.
The new rule, if at all, is clearer in that regard and
emphasises the judicial character of the proceeding.
If it was a tribunal, this Court under Art. 136 of the
Constitution can entertain an appeal against the order
of the Central Government made in exercise of its
revisional powers under r. 55 of tbe Rules."
(i}(I96':ji S.C.R. 775.
(2) [1966] 2 S. C.R. 466,
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BHAGAT RAJA v. UNION (Mitter, J.)
309
Let us now examine the question as to whether it was incumbent on the Central Government to give any ·reasons for its
decision on review.
It was argued that the very exercise of
judicial or quasi judicial powers in the case of a tribunal entailed
upon it an obligation to give reasons for arriving at a d~ision
for or against a party. The decisions of tribunals in Indta 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 appellate
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 dealmg with the appeal. Ordinarily, in a case like this,
if the State Government gives sufficient reasons for accepting
the application of one party and rejecting that of the others,
as it must, and the Central Government adopts the reasoning
of the State Government, this
Court may proceed to
examine whether the reaspns given are sufficient for the purpose
of upholding the decision.
But, when the reasons given in the
order of the State Government are scrappy or nebulous and the
Central Government makes no attempt to clarify the same, this
Court, in appeal may have to examine the case de novo without
anybody being the wiser for the review by the Central Government. If the State Government gives a number of reasons some
of which are good and some are not, and the Central Government merely endorses the
order of the
State Government
without specifying those reasons which according
to
it
are
sufficient to -uphold the order of the State
Government,
this
Court, in al?peal, may find it difficult to ascertain which are the
grounds which weighed with the Central Government in upholding the order of the State Government. In such circumstances,
what is known as a "speaking order" is called for.
The order of the Central Government of June :2, 1966 is
so wo~ded as to be open to the construction that the reviewing
authority was primarily concerned with finding out whether any
grounds had been made out for interfering with the decision of
the State Government. In other words, the Central Government was not so much concerned to examine the grounds or
the reasons for the decision of the State Government but to find
out whether here was any cause for disturbing the same. Prima
facie the order does not show that the reviewing authority had
anv thought of expressing its own reasons for m:uutaining the
decision arrived at. If detailed reasons had been given by the
310
SUPREME COURT REPORTS
(1967] 3 S,C.R.
State Government and the Central Government had indicated
clearly that it was accepting the reasons for the decision of the
State Government, One would be in a position to say that the
reasons for the grant of a lease to a person other than the
appellant were· obvious.
But, where as here, the State Government does not find any fault or defect in the application of the
unsuccessfully applicant and merely prefers another on the ground
that "he had adequate general experience and technical knowledge and was an old lessee without any arrears of mineral dues"
it is difficult to say what turned the scale in favour of the successful
applicant excepting the fact that he was known to the State
Government from before. We do not want to express any views
on this but if this be a proper test, then no new entrant in the
field can have any chance of success where there is an old lessee
competing with him.
The order of the
Central Government
.does not bring out any reason for its own decision except that
no ground for interference with the decision arrived at was
established.
Now we propose to examine some decisions of this Court
where the question as to whether the reviewing authority should
give reasons for its decisions was gone into. In Harinagar Sugar
Mills v. Shyam Sundar Jhunjhunwala(") this Court
had
to
consider whether the Central Government exercising appelVate
powers under s.111 of the Companies Act, 1956
before
its
amendment in 1960 was a tribUI)al exercising judicial functions
and as such, subject to the appellate jurisdiction of this Court
under Art. 136 of the Constitution and whether the
Central
Government had acted in excess of its jurisdiction, or acted
illegally otherwise in directing the company to register the transfer or transfers in favour of the respondents. There, the articles of
association of the company concerned gave the
directors
the
right in their absolute discretion and without assigning any
reason to refuse to register any transfer of shares. The directors
declined to register some shares in the name of the transferees
who applied to the High Court at Bombay for orders under
s. 38 of the Indian Companies Act, 1913 for rectification of the
share register on the ground that the board of directors had
exercised their right ma/a fide, arbitrarily and capriciously. The
High Court rejected tbese petitions on the ground that controversial questions of law and fact could not be tried .in summary
proceedings under s. 38. The transferees request.ed the directors
once more to register the shares.
On their refusal to do so,
appeals were preferred to the Central Government under
s.111 (3) of the Indian Companies Act, 1956 which had since
come into operation. The Joint Secretary, Ministry of Finance,
who heard the appeals declined ·to order registration of transfers
(I) [1962] 2 S.C.R. 339 @<' 357.
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BHAGAT RAJA v. UNioN (Mitter, J.)
31.l
practically on grounds similar to those put forward by the High
Court of Bombay.
Thereafter, the original holder of the shares
transferred some shares to his son and some to his daughter-iniaw and the transferees requested the company to register
the
transfers.
The directors once more refused.
Against the resolution of the directors, separate appeals were preferred by the son
and daughter-in-law of the original holder of the shares. The
Deputy Secretary to the Government of India set aside the resolution passed by the board of directors and directed the company
to register the transfers. No reasons were however given for such
order. The company came up in appeal to this Court under Art.
136 of the Constitution. According to the judgment of the
majorit)' of Judges, the exercise of authority by the Central Gove.rnment was judicial as it had to adjudicate upon the rights of
contesting parties when there was a !is between them.
It was
observed in that case that
"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
Art. 136 of the Constitution, we fail to s~e how the
power of this court can · be effectively exercised
if
reasons are not given by the Central Government in
support of its . order."
This Court further held that there had been no proper trial of
the appeals, no reasons having been given in support of the
orders of the Deputy Secretary who heard them and
in
the
result, the orders were quashed with a direction that the appeals
be re-heard and disposed of according to law.
In Sardar Govindrao v. State ( 1 ) the appellants who claimed
to be descendants of fonner ruling chiefs in some districts of
Madhya Pradesh applied under the Central Provinces and Berar
Revocation of Lan;:i Revenue Exemptions. Act, 1948 for grant
of money or pension as suitable maintenance for themselves.
They held
estates in
two districts on favourable
terms as
Ja!zgirdars Maufidars and Ubaridars and enjoyed an exemption
from payment of land revenue aggregating Rs.
27,828-5-0
per year. On the passing of the Act, the exemption was lost and
they claimed to be entitled to grant of money or pension under
the pr<;>visions of the Act. They applied to the Deputy
Commissioner who
forwarded
their
applications
to
the
State Government.
These were rejected without any
reasons
being given therefor. The appellants file.ct a petition in the High
Court of Madhya Pradesh under Art. 226 of the Constitutfon
for a writ of certiorari to quash the order of the State Government.
l'he High· Court held that the State Government "was
(1) [1965] 1 S.C.R. 678.
312
SUPREME COURT REPORTS
(1967) 3 S.C.R.
not compelled to grant either money or pension
because the
exercise of the power under s. S was discretionary and the peti·
tion, therefore was incompetent." S. S (3) of the C.P. and Berar
Act provided as follows :-
"The Provincial Government may make a grant
of money or pension-
( i) for the maintenance or upkeep of any religious, charitable or public institution or service
of a like nature, or
(ii) for suitable maintenance of any family
of a
descendant from a former ruling chief."
S. 6 barred the jurisdiction of civil courts. It was observed b}
this Court:
"The Act lays down upon the Government a duty
which obviously must be performed
in a judicial
manner.
The appellants did not seem to have been
heard at all. The Act bars a suit and there is all the
more reason that Government must deal with such case
in a quasi-judicial manner giving an opportunity to
the claimants to state their case in the light of the
report of the Deputy Commissioner.
The appellants
were also entitl~ to know the reason why their claim
for the grant of money or pensipn was
rejected by
Government and how they were considered
as
not
falling within the class of persons who it was clearly
intended by the Act to
be compensated in this
manner. . . . . . . . As the order of Government
does
not fulfil the elementary requirements
of
a
quasijudicial process YI!: do not consider it necessary to order
a remit to the High Court."
In the result this Court set aside the order of the Government
and directed the disposal of the case in the light of the remarks
made.
In M. P. Industries v. Union(') the order of the Central
Government rej~cting the revision application under r. 55 of the
Mineral Concession Rules was couched in exactly
the
samo
language as the order in appeal before us (see at p. 475 of the
report).
One cannot help feeling that the Ministry concerned
have a special form which is to be used whenever a review
application is to be rejected.
This may easily lead anyone to
believe that the review is a sham and nothing but the formal
observance of the power granted to the Cen !):al Government.
In that case, all the three learned Judges of this Court who heard
the appeal were unanimous in dismissing it : sorne of the obser·
(I) [196] I S.C.R. 466.
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BHAGAT RAJA v. UNION lMitler, I.)
313
vations made bear repetition.
It was there 11rgued that if tho
Central Government had to give reasons when it functioned u
a tribunal, it would obstruct the work of the Govenunent and
lead' to unnecessary delays.
As to this it said by our present
Chief Justice :
"The Central Government functions only through
different officers and in this case it functioned through
an Under Secretary.
The condition of giving reasons
is only attached to an order made by
the
Government when it functions judicially as a tribunal in a
comparatively small number of matters and not in
regard to other administrative orders it passes . . ... .
Our Constitution posits a welfare State ..... .
In the context of a welfare State, administrative tribunals
have come to stay. Indeed, they are the nece~sary 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 minimise arbitrnriness. 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 minimises 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 officers 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 it discloses extraneous or
irrel~vant considerations, will be subject to judicial
scrutmy 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."
It was further obseryed in that case that the position of ordinary
courts of law was different from that of tribunals exercising judicial functions and it was said :
. "A Judge is trai~ed t~ look at t~ings objectively,
uninfluenced by cons1derallons of pohcy or expediency;
but, an execul!ve officer generally looks at things from
the standpoint of policy and expediency. The habit of
3U
. SUPREME COURT REPORTS
[1967] 3 S.C.R .
mind of an executive .offi6er 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 rcvisional 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 lacoruc and does not give any reasons.
That apart, when we insist upon reasons; we do. not
prescribe any particular form or scale of the reasons.
The extent and the nature of the reasons depend upon
case of aflirmance where the original tribunal gives
hunal shall give its own reasons succinctly; but in
a
case of affirmance where the original tribunal gives
adequate reasons, the appellate tribunal may dismiss
the appeal or the revision, as the case may be, agreeing
with those reasons.
What is essential is that reasons
shall be given by an appellate or revisional tribunal
expressly or by reference to those given by the original
tribunal. The nature and the elaboration of the reasons
necessarily depend upon the facts of each case."
It must be noted however that the above view was not shared
by the two other Judges of the Bench constituting this Court. It
was said by them :
"For the purpose of an appeal under Art. 136,
orders of Courts and tribunals stand on the same footing.
An order of court dismissing a revision application often gives no reason, but this is not a sufficient
ground for quashing it. Likewise, an order of an adminstrative tribunal rejecting a revision application
cannot be pronounced to be invalid on the sole ground
!hat it do.es not give reasons for the rejection."
They distinguished the case of Harinagar Sugar Mills Ltd.(') on
the ground that the Central Government had reversed the. deci·
siOL appealed without giving any. reasons and the latter did not
disclose any apparent grounds for reversal and added :
"There is a vital · difference between the order of
reversal by the appellate authority in that case for no
(1) [19621 2 S.C.R. 339.
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BHAGAT RAJA V. UNION (Mitte~. J,)
reason whatsoever and the order of affinnance by the
revising authority in the present case."
315
As has already been :noted, the board of directors in that case
did not give any reasons for the refusal to register and th~ ~entral
Government adopting the same course reversed the decmon of
the directors without giving any reasons. Clearly, the act of the
Central Government there savoured of arbitrariness.· Under the
articles of association of the company, the directors were not
obliged to give any reasons.
Their power of refusal was unrestricted if they acted bona fide or in the interest of the company.
The reversal of their discretion clearly amounted to a finding that
they had acted arbitrarily or ma/a fide and one was, left to guess
the reasons of the Central Government for coming to this conclusion.
As has already been said, when the authority
whose
decision is to be reviewed gives reasons for its conclusion and the
reviewing authority affinns the decision for the reasons given by
the lower authority, one can assume that the reviewing authority
found the reasons given by the lower authority as acceptable to
it; but where the lower authority itself fails to give any reason
other than that the successful applicant was an old lessee and the
reViewing authority does not even refer to that ground,
this
Coun has to grope in the dark for finding out reasons for upholding or rejecting the decision of the reviewing authority. After
an a tribunal which exercises judicial or quasi-judicial powers can
certainly indicate its mind as to why it acts in a particular way
and when important rights of parties of far-reaching consequence
to them are adjudicated upon in a summary fashion,
without
giving a personal hearing where proposals and counter-proposals
are made and examined, the least that can be expected is that the
tribunal should tell the party why the decision is going against
him in all cases where the law gives a further right of appeal.
On behalf of the res{Xlndents, it was contended that r.
55
whic~ provided for a revision did not envisage the filing of fresh
pleadmgs and fresh material but only invited comments of the
pllrties with regard to the matter before the Central Government.
It was argued that if after going through the
comments
and
co'!nter-comments t_he C~ntral Government found no reason to
arnve .at a conclusion different from that of the State Governll}Cnt: 1t W'.15 not called upon to disclose any grounds for its decis10n 1~ review. Our. attention was drawn in particular tor. 26 of
the Ml!leral Concession Rules which enjoined upon the State
Gov~rnment to communicate in .writing the reasons for any .order
tefus.1~g ~ grant or re~e~ a mining lease. The absence of any
P.?OV1S1on Ill r. 55 for glVlng such reasons was said to be decisive
911, the.matter ~s·indiCl\tiye of.the view of the legislature that there
was no necessity f~r giving reasons for the order on review. We
find ounel\"e8 unable to ·accept this contention.
Take the case
31S
SUPREME COURT REPORTS
[1967] 3 S.C.R\
where the Central Government sets aside the order of the State
Government without giving any reasons as in Harinagar Sugar
Mills' case('). The party who loses before the Central Government
cannot know why he had lost it and would be in great difficulty
in pressing his appeal to the Supreme Court and this Court would
have to do the best it could in circumstances which are not con·
ducive to the proper disposal of the appeal. Equally, in a case
where the Central Government merely affirms the order of the
State Government, it should make it clear in the order itself as
to why it is affirming the same. It is not suggested that the Cen·
trnl Government should write out a judgment as courts of law are
wont to do.
But we find no merit in the contention that an
authortiy which is called upon to determine and adjudicate upon
the rights of parties subject only to a right of appeal to this Court
should not be expected to give an outline of the process of reasoning by which they find themselves in agreement with the decision
of the State Government. As a matter of fact, r. 26 considerably
lightens the burden of the Central Government in this respect. As
the State Government has to give reasons, the Central Govern·
ment after considering the comments and counter-comments on
the reasons given by the State Government should have no diffi·
culty in making up its mind as to whether the reasoning of the
State Government is acceptable and to state as briefly as possible
the reasons for its own conclusion.
Our attention was drawn to a judgment of this Court in Nand·
ram Hunatram, Calcutta v. Union of India('). There, one of the
points made by the appellant in the appeal to this Court was that
the order of the Central Government, in review, upholding the
action of the State Government cancelling the mining lease grant·
ed to the appellant was bad inasmuch as no reasons were given. It
was pointed out in the judgment in that case that the facts there
were so notorious that the reasons for the action of the State Gov·
ernment and the confirmation of its order by the Central Government were too obvious and could not possibly be questioned by
anybody. The1·e the partners of the appellant firm had fallen out
among themselves and none of them was willing to spend money
on the colliery with the result that the work came to a stand-still
and the colliery began to get flood~. At this junc~re, Govern·
mcnt stepped in and made ~ pronus~ to the essentt~l workmen
that their wa&es would be paid and this saved the colhery.