# M/s. BHARAT BARREL & DRUM MFG. CO v. L. K. BOSE & ORS

- **Citation:** [1967] 1 S.C.R. 739
- **Court:** Supreme Court of India
- **Decided:** 1966-10-05
- **Bench:** K. N. Wanchoo, J.M. Shelat, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-bharat-barrel-drum-mfg-co-v-l-k-bose-ors-3909
- **Pages:** 13

## Headnote

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Essential Commodities Act, 1955--Steel Control Order, 1956---Con•
troUer cancelling allotment of steel sheets-In subsequent inquiry re/uitlng to record oral evidence-Natural justice whether
vlolated--Error
apparent on face of award, what is.
The appellant company carried on the
business
of manufacturin1
barrels and for that purpose required steel sheets.
By reason of
the
Essential Commodities Act, 1955 the Iron & Steel (Control) Order, 1956
and diverse orders passed by the Iron and Steel Controller the appellant
company could get supply of steel sheets only
by obtaining release
orders from the Controller on stockists and importers. The Controller
would direct under such a release order an importer or a stockist to
supply steel sheets to the appellant company at rates and on terms and
conditions specified by him therein. By
three such release orders of
October 28 and 29, 1960 the Controller directed the 6th respondent to
supply to the appellant a certain quantity of steel sheets at a specified
rate. There was dispute between the appellant and the 6th respondent
as to the quantity to be supplied and the rate of supply. The appellant
claimed that it had already paid an excess sum of Rs. 7 lacs and odrl to
the 6th respondent in respect of earlier release orders. On the dispute
being referred to the Controller he ordered the 6th respondent to supply
steel sheets to the appellant at the specified rate after making allowance
for the excess of Rs. 7 lacs and odd already paid, He also ordered that if
tbe appellant did not _Pay the price and the transaction was not complet·
ed within a certain time owing to the fault of the appellant he would
· allot the steel sheets to some other party. Owing to the persistence of
differences with the 6th respondent the appellant could not carry out the
transaction but instead filed a suit in the High
Court. The Controller
then cancelled the allotment in favour of the appellant.
Against
this
order of cencellation the appellant filed
a writ
petition in the High
Court. The High Court passed a con.sent order asking the Controller to
'hear' the parties and decide whether the
appellant was at fault in not
lifting the goods. At the hearing the appellant wanted to examine a
witness but the request was refused by the Controller. The Controller
decided against the appellant. The appellant filed another writ petition in
the High Court. The writ petition and the subsequent letters patent ai)peal
filed by the appellant were both dismissed. The appellants came to this
Court and contended :
(I) The Controller by refusing to examine the appclla'1t's witn ...
violated natural 1ustice.
(2) On the question of
the refund of the excess charges tho
Controller's order suffered from an error apparent on
the
face of the record; and
(3) The finding of the Controller that the appellant wanted lo
pick and choose the goods was without evidence.
HELD : (I) While considering the question of breach of the princl·
pies of natural justice the court should not proceed as if there al"e any
740
SUPREME COURT REPORTS
(1967] l S.C.R.
infiexible rules of natural justice of univer'3al application. The
Court
has to consider in each case whether in the light of the facts and circumstances of that case, the nature of the issues -invoJved in the inquiry~ the
nature of the order passed and tbe interest affected thereby, a fair and
reasonable opportunity of
being heard was furnished by the person
ai!'ectcd.
A refusal to record oral evidence does not
necessarily mean
contravention of the rules of natural justice.
[746 D; 747 G-H]
Local Government Board v. Arlidge, [1915) A.C. 120, New Prakash
Transport Co. Ltd. v. New Suwarna Traltsport Co. Ltd. [1957) S.C.R.
98, Western India Match Co. v. Industrial Tribunal, Madras,
[1962) 1
L.L.J. 629, De Verteuil v. Knaggs & Anr. [1918)
A.C. 557,
General
Medical Council v. Spackman, [1943] A.C. 627. and Union of India v.
T. R. Varma, [1958] S.C.R. 499, referred to.
The Controller had beard the case

## Text

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M/s. BHARAT BARREL & DRUM MFG. CO.
v.
L. K. BOSE & ORS.
October 5, 1966
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[K. N. WANCHOO, J.M. SHELAT AND G. K. MITTER, JJ.]
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Essential Commodities Act, 1955--Steel Control Order, 1956---Con•
troUer cancelling allotment of steel sheets-In subsequent inquiry re/uitlng to record oral evidence-Natural justice whether
vlolated--Error
apparent on face of award, what is.
The appellant company carried on the
business
of manufacturin1
barrels and for that purpose required steel sheets.
By reason of
the
Essential Commodities Act, 1955 the Iron & Steel (Control) Order, 1956
and diverse orders passed by the Iron and Steel Controller the appellant
company could get supply of steel sheets only
by obtaining release
orders from the Controller on stockists and importers. The Controller
would direct under such a release order an importer or a stockist to
supply steel sheets to the appellant company at rates and on terms and
conditions specified by him therein. By
three such release orders of
October 28 and 29, 1960 the Controller directed the 6th respondent to
supply to the appellant a certain quantity of steel sheets at a specified
rate. There was dispute between the appellant and the 6th respondent
as to the quantity to be supplied and the rate of supply. The appellant
claimed that it had already paid an excess sum of Rs. 7 lacs and odrl to
the 6th respondent in respect of earlier release orders. On the dispute
being referred to the Controller he ordered the 6th respondent to supply
steel sheets to the appellant at the specified rate after making allowance
for the excess of Rs. 7 lacs and odd already paid, He also ordered that if
tbe appellant did not _Pay the price and the transaction was not complet·
ed within a certain time owing to the fault of the appellant he would
· allot the steel sheets to some other party. Owing to the persistence of
differences with the 6th respondent the appellant could not carry out the
transaction but instead filed a suit in the High
Court. The Controller
then cancelled the allotment in favour of the appellant.
Against
this
order of cencellation the appellant filed
a writ
petition in the High
Court. The High Court passed a con.sent order asking the Controller to
'hear' the parties and decide whether the
appellant was at fault in not
lifting the goods. At the hearing the appellant wanted to examine a
witness but the request was refused by the Controller. The Controller
decided against the appellant. The appellant filed another writ petition in
the High Court. The writ petition and the subsequent letters patent ai)peal
filed by the appellant were both dismissed. The appellants came to this
Court and contended :
(I) The Controller by refusing to examine the appclla'1t's witn ...
violated natural 1ustice.
(2) On the question of
the refund of the excess charges tho
Controller's order suffered from an error apparent on
the
face of the record; and
(3) The finding of the Controller that the appellant wanted lo
pick and choose the goods was without evidence.
HELD : (I) While considering the question of breach of the princl·
pies of natural justice the court should not proceed as if there al"e any
740
SUPREME COURT REPORTS
(1967] l S.C.R.
infiexible rules of natural justice of univer'3al application. The
Court
has to consider in each case whether in the light of the facts and circumstances of that case, the nature of the issues -invoJved in the inquiry~ the
nature of the order passed and tbe interest affected thereby, a fair and
reasonable opportunity of
being heard was furnished by the person
ai!'ectcd.
A refusal to record oral evidence does not
necessarily mean
contravention of the rules of natural justice.
[746 D; 747 G-H]
Local Government Board v. Arlidge, [1915) A.C. 120, New Prakash
Transport Co. Ltd. v. New Suwarna Traltsport Co. Ltd. [1957) S.C.R.
98, Western India Match Co. v. Industrial Tribunal, Madras,
[1962) 1
L.L.J. 629, De Verteuil v. Knaggs & Anr. [1918)
A.C. 557,
General
Medical Council v. Spackman, [1943] A.C. 627. and Union of India v.
T. R. Varma, [1958] S.C.R. 499, referred to.
The Controller had beard the case of the parties through their counsel. The witness was a director of the appellant company.
Being present at the bearing, he could have instructed counsel to state all that he
wanted to depose.
That not having been done the company could have
no grievance of not having been heard.
The witness produced by the
appellant was not of a material character. On the facts of the case the
refusal of the Controller to examine the witness in question did not constitute a breach of natural justice. [749 C-D; 750 C]
(ii) An error of law on the face of an award means that the court
must first find whether there is any legal proposition which is the basis
of the award.
Reading the impugned order 1t was difficult to say what
legal proposi1ion it contained in respect of which it could be said
that
there was an error on the face of the record. 1750 D-EJ
.
(iii) It could not be said that there was no evidence that the appellant company wanted to pick and choose the goods. (751 G]
C!vn. APPELLATE JURISDJCTION ; Civil Appeal No. 928 of
1965.
Appeal by special leave from the judgment and order dated
April 24, 1964 of the Calcutta High Court in Appeal from Original
Order No. 269 of 1963.
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Bisha11 Narailf, B. Dutta, S. C. Chagla, Ravi11der
Narain,
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for the appellant.
B. Sen and R. H. Dltebar, for respondents Nos. 1-5.
A. K. Sen, Rames/nvar Nath, S. N. Andley, P. L. Vohra,
Mahi11der Narain, for respondent No. 6.
The Judgment of the Court was delivered by
Sbelat, J.-This appeal by special leave is directed aganist the
judgment and order of the High Court at Calcutta which upheld the
judgment and order of the Single Judge of that High Court
dismissing the writ pettition filed by the appellant company.
The appeC!ant company was at all material times carrying on
the business of manufacturing barrels and for that purpose reqllired steel sheets. By reason of the Essential Commodities Act,
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BHARAT BARREL CO. V. L. K. BOSE (She/at, J.)
741
1955, the Iron and Steel (Control) Order, 1956 and .diverse orders
passed by the Iron and Steel Controller the appellant company
could get supplies of steel sheets only by obtaining release
orders from the Controller on stockists and 'importers. The Controller would direct under such a release order an importer or a
stockist to supply steel sheets to the appellant company at rates and
on terms and conditions specified by him therein.
By three such
release orders, of October 28 and 29, 1960 the Controller directed the
6th respondent M/s. Amichand Pyarelal & Co.,_ to supply to the
appellant company 3406.386 metric tons of steel sheets. Prior to
these three orders certain other release orders had been issued on the
6th respondent and the appellant rompany had paid large amounts
in respect of steel sheets supplied thereunder on the basis of pro forina
invoices issued by the 6th respondent and their sister concerns. An
amonnt of Rs. 7 lacs and odd said to be excess payment was claimed
by the appellant company from the 6th respondent to recover which
theappellant company had filed· suits in Angust 1961 and January
1963 in the High Courts at Bombay and Calcutta. In pursuance of
the said three release orders the 6th respondent sent its pro Jonna
invoice but only for 2,168 tons and odd stating that it had
already delivered between November 1961 and February 1962,
1238 tons and odd in part satisfaction of the said release orders.
In these invoices the · 6th respondent claimed Rs. 975.55 per
metric ton which was a higher rate than the one fixed by the Controller. The appellant company thereupon tendered the price at
the rate fixed by the Controller also deducting therefrom the said
excess of Rs. 7 lacs and odd. The 6th respondent declined to accept
the same whereupon the appellant company apprised the Controller
about the difference between them. By his order dated 1/2 May,
1962 the Controller directed that the 6th respondent should charge
the appellant company at the rate of Rs. 921 per metric ton and
deduct the excess charges paid to it earlier. He also directed the
6th respondent to send to the. appellant company revised proforma
invoice within three days.
The . order also ~lated that ·the
appellant company should make arrangement for payment within
three days of the receipt of the revised proforma invoice and that if
the transaction was not completed by May 12, 1962 due te any
fault on the part of the· appellant company he would consider the
disposal of the said sheets in favour of some other party.
The Controller sent a copy of, this letter to the appellant company
and in the note appended thereto informed the company that it should
lift the materials before May 12, 1962. ·The 6th respondent thereafter sent its revised invoice at the rate directed by the Controller
but without adjusting the said excess and insisting that 1,238 tons and
odd were already delivered and that ·only 2, 168 tons remained to be
delivered. In the said invoice it also included the price of 1,238 tons
at Rs. 921 per metric ton. The appellant company tendered its
banker's slip at the rate of Rs. 921 per ton after deducting therefrom
742
SUPJlBMB COUJlT JlBPOJlTS
[1967] I S.C.Jl.
the said amount of Rs. 7 lacs and odd as excess payable to it by the
6th respondent. The 6th resi;ondent refused to accept the said slip
and instead sent on May 7, 1962 another invoice without adjusting
the said excess thus, according to the appellant company, making it
impossible for it to lift the steel sheets. The appellant company
filed another suit in the High Court at Bombay inter alia for a
mandatory injunction directing the 6th respondent to deliver the
entire quantity of 3,406 tons and odd at Rs. 921 after deducting
f.rom the price therefor the said excess of Rs. 7 lacs.
By his order dated 24/26 May, 1962 addressed to the 6th respondent the Controller allotted 2,168 and odd tons of the said steel
sheets in favour of the 7th respondent cancelling the allotment in
favour of the appellant company. Appended to the said order was
a note of the Controller addressed to the appellant company which
ran as follows :-
"Due to their non-lifting of Drum sheet 18G for
2168.25 M{f against. ... (the said three release orders), they
are advised to note that the same quantity of allotment
against the said R/Os has been treated as cancelled, matter is
treated as closed finally."
Against this order of cancellation the appellant company filed a
writ petition in the High Court at Calcutta. It came up for hearing
on September 14, 1962 before Banerjee J. when the parties took a
consent order. The said consent order provided, inter a/ia, that the
Controller shall himself "hear" the parties and ascertain for himself
which of them was at fault in making the said order of l /2 May,
1962 ineffective. It also provided that if the Controller were to
find that the appellant company was not at fault but that the order
could not be complied with by it beca11se of any unreasonable stand
taken by the 6th respondent he should reconsider his said order of
cancellation of allotment. On the other hand if he were to find that
the appellant company was at fault he need not change the said
cancellation order.
In pursuance of the said consent order the Controller fixed
December 13, 1962 for hearing the parties and gave permission to
them to 8ppear through counsel. On the 13th and the 18th December, I 962 the Con~roller heard the parties who appeared through
counsel and took on record correspondence, affidavits and other
documents produced by the parties.
The appellant company
contended that the 6th respondent failed
to implement the said
order and thereby made it ineffective. The contention was tha! the
6th respondent was not justified in offering delivery of 2,168 and odd
tons only instead of 3,406 and odd tons, that it was not justified in
claiming that the delivery of the said 1,238 tons and odd was under the
said release orders, that the said 1,238 tons and odd were delivered
under and in pursuance of an oral agreement arrived at between
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BHARAT BARREL CO. V. L. K. BOSB (She/at, /,)'
743Lalta Prasad Goenka, a director of the appellant company and one
Jitpal on behalf of the 6th respondent whereunder the 6th respondent
had agreed to deliver 4,500 tons from out of its free sale stock at
Rs. 875 per ton, that the said 1,238 tons having been delivered under
the said agreement the entire quantity of 3,406 tons and odd remained
undelivered and that therefore its offer to deliver only 2,168 and odd
tons was not a proper offer. The appellant company also contended that the 6th respondent failed to deduct the excess amount of
Rs. 7 lacs and- odd though directed by the Controller and further
that it was not entitled to charge the said 1,238 tons and odd at
Rs. 921 per ton as the said quantity as aforesaid was delivered under
the said oral agreement and therefore could charge at Rs. 875 per
ton. It also contended that in spite of specific directions from the
Controller the 6th respondent failed to send its said revised pr<r
forma invoice within three days. The last contention however was
not pressed and it need not therefore detain us. At the time of the
hearing the appellant company offered to examine the said Lalta
Prasad Goenka as its witness to prove the said oral agreement. The
Controller, however, refused to record his evidence.
On December 21, 1964 the Controller passed his order holding.
, the appellant company responsible for not carrying out his directions in the order dated 1/2 May, 1962 and held that the cancellation
of allotment in favour of the appellant company need not be reconsidered. As regards the appellant company's
application to
examine the said Lalta Parsad, he gave three reasons for refusing it:
(I) that he was not in a position to take down the evidence; (2) that
it was not possible for him to examine him on oath or on solemn
affirmation; and (3) that his evidence would not have been conclusive as one party would have asserted and the other party would
have denied the aid agreement.
Aggrieved by this order the appellant company filed a writ
petition in the High Court at Calcutta for having the said order
quashed. The writ petition was heard by Banerjee J. who dismissed
it on the ground that the said order could not be held to be ma/a
fide or one made at the instance of or with a view to help the 6th
respondent as alleged. He held that even if the Controller was
wrong in refusing to record the testimony of Latta Prasad such a
refusal was not perverse or wanting in bona fides.
The learned
Judge also held that the finding of the Controller that the appellant
company's demand for inspection and survey of the goods offered
by the 6th respondent was unreasonable was in the circumstances
of the case neither perverse nor arbitrary. He also held thaUhough
the Controller's refusal to examine Lalta Prasad was unfortunate
and the reasons given by him were open to criticism it could not be·
said to be perverse. He observed that though a different Tiew
could be taken on the question as to blameworthiness the view taken
by the Controller could not be said to be arbitrary or perverse, for.
744
SUPREME COURT REPORTS
[1967] I S.C.R.
it was difficult for the Controller to decide on the evidence adduced
by the parties whether the 6th respondent was guilty of not offering
the full quantity of goods under the said release orders.
The
learned Judge added that the Controller may be right in condemning I he appellant company for its insistence that goods should be
of standard and merchantable quality. The pendency of the appellant company's suit to recover the said excess may also have made it
difficult for the Controller to hold that the 6th respondent was to be
blamed in not adjusting the said excess in the said revised proforma
invoice.
If, in these circwnstanocs, the Controller held that the
appellant company was more to be blamed than the 6th respondent
it would not be possible to quash his order either on the ground
of its being arbitrary or perverse. The learned Judge examined
the appellant company's letters dated the 9th, the 11th, the 17th of
January, 1962 and February 6, 1962 and found that its case with
regard to the oral agreement suffered from contradictions, for,
at one stage its case was that the 6th respondent had agreed to supply
4,500 tons over and above 3,400 and odd tons under the said release
orders and the said 1,238 tom; were delivered under the said oral
agreement while in the letter of February 6, 1962 its case was that the
6th respondent was to deliver 4,500 tons which would include the
said 3,400 and odd tons deliverable under the said release orders and
charge at the rate of Rs. 875 per ton.
Therefore, the delivery of
1,238 tons, if this letter were to be true, would be not under the oral
agreement but under the release orders and consequently the 6th
respondent could not be said not to have offered the full quantity
under the said release orders. On the other hand, there was also
the letter of the 6th respondent to the Steel Minister in which it
had complained of the appellant company not having taken delivery
at all. If its case that 1,238 tons were delivered under the release
orders, was correct the statement made by it to the said Minister would
obviously be not correct. In the view of Banerjee J. the Controller
took a very lenient view when he simply characterised the letter as
unethical. He observed that instead of speculating about the unethical attitude of the 6th respondent the Controller could well have
agreed to record the evidence of the said Lal ta Prasad. According
to the learned Judge, howsoever unfortunate that refusal was the
order could not be held to be perverse or arbitrary and since the
case of the appellant company regarding the oral agreement was
inconsistent the Controller could not be blamed for not accepting
it though it might be that a court of law might come to a different
conclusion.
Against the order of Banerjee J. the appellant company filed
a Letters Patent Appeal which was heard by a Division Bench consisting of Bachawat and A. K. Mukherjee JJ.
Before the Division
Bench the Controller's finding that it was for the first time that in its
netter dated May 8, 1962 the appellant company made it a condition
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BHARAT BARREL co. v. L. K. BOSE (She/at, J.)
745
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that it would accept delivery only of goods found on inspection to
be of standard and merchantable quality, was challenged. The
appeal court found that even b~fore the said letter of May 8, 1962
there was correspondence in which allegations of the goods having
become rusty and damaged were made and a demand for inspection
was also made. But the appeal court found that those letters indiB
cated that the appellant company was agreeable to take delivery of
the goods in their present condition but was insisting upon a certificate of their being merchantable or not so as to enable it to
demand rebate. Therefore the Controller was in a way right when he
said that it was for the first time in its letter of the 8th May, 1962 that
the appellant company insisted that it would accept only those goods
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which were of standard and merchantable quality. The. appeal
court also rejected the company's contention that until May 7,
1962 when the 6th respondent sent its revise<! invoice asking the
appellant company to take delivery of the goods as "it is lying with
us" the appellant company had no chance to raise this point. The
learned Judges observed that that contention was not sustainable
as the appellant company could have made a demand for the goods
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being of standard and merchantable quality earlier as the correspondence showed that it was all along aware that the said goods had
become rusted. The proper thing for the appellant company therefore was to waive the said condition assuming it was entitled to insist upon it and subsequently claim rebate particularly as the demand
for inspection was only with the object of claiming rebate. · AB reE
gards the Controller's finding that the appellant company was more
to be blamed for the non-implementation of the order of 1/2 May,
1962, the learned Judges observed that though the Controller had
directed the 6th respondent to deduct the said excess and though the
6th respondent had not done so there was difficulty in the way of the
Controller to throw the blame on the 6th respondent. Neither
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party had asked the Controller to fix the amount of the said excess
and the time when the appellant company should withdraw its suit.
There was besides discrepancy in the amount of excess claimed by the
appellant company. In its letter dated February 23, 1962 to the
Controller the excess amount claimed was Rs. 7 ,40,595 whereas
in its letter dated April 23, 1962 to the 6th respondent the claim was
for Rs. 7,64,438.40 nP. The difficulty therefore was as to what was
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the amount which the 6th respondent was expected to refund. As
regards the Controller's refusal to record the evidence of the said
Lalta Prasad the learned Judges were of the view that it was not
incumbent upon the Controller to record such evidence, that the
Controller had given adequate opportunity to both the parties to
adduce their respective case, that all the relevant correspondence
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and documents were produced by them before the Controller and
that therefore it was impossible to hold that there was any br~ach of
the principles of natural justice. In this view the Division Bench
confirmed the order of Banerjee J. and dismissed the appeal.
MI7Sup. C.1./66-3
746
SUPREME COURT REPORTS
[1967) l S.C.R.
Challenging the order of the High Court Mr. Bishan Narain
for the appellant company raised three contentions :
{!) that the Controller did not hear the appellant company
in full and violated the principles of natural justice by
refusing to record the evidence of Lalta Prasad;
(2) that on the question of refund of the excess charges
the Controller's order suffered from an error of law
apparent on the face of the record; and
(3) that the finding of the Controller that the appellant
company wanted to pick and choose was without
evidence.
In order to appreciate the first contention it is necessary first
to consider the content of the principles of natural justice. That
question has been the subject-matter of a number of decisions.
It is now well-settled that while considering the question of breach of
the principles of natural justice the court should not proceed as if
there are any inflexible rules of natural justice of universal application. The Court therefore has to consider in each case whether
in the light of the facts and circumstances of that case, the nature of
the issues involved in the inquiry, the nature of the order passed and
the interests affected thereby, a fair and reasonable opportunity of
being heard was furnished to the person affected.
In Local
Go-remment
Board v. Arlidge(1), Lord Parmoor observed as
follows:-
"Where, however, the question of procedure is raised
in a hearing, before some tribunal other than a court of
law, there is no obligation to adopt the regular forms of
judicial procedure.
It is sufficient that the case has been
heard in a judicial spirit and in accordance with the principles of substantial justice. In determining whether the
principles of substantial justice have been complied with
in matters of procedure regard must necessarily be had to
the nature of the issue to be determined and the constitution
of the Tribunal."
A similar approach to the question is also to be found in New
Prakash Transport Co., Ltd. v. New Suwarna Transport Co. Ltd.(2),
where this Court laid d1>wn the following guiding criterion :-
"Rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the
legislature under which they have to act, and the question
whether in a particular case they have been contravened
must be judged not by any preconceived notion of
what they may be but in the light of the provisions of the
relevant Act."
(I) (191'1 A.C. t20.
(2) [1957) S.C.R. 98.
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BHARAT BARREL CO. V. L. K. BOSE (She/at, /,)
747
In that case r. 73 of the Rules framed under the Motor Vehicles Act, IV of 1939 provided that the Chairman of the Provincial
Transport Authority on receipt of an appeal shall appoint the
time and place for hearing the appeal and shall give a notice of not
less than thirty days to the appellant, the origial authority and any
other person interested in the appeal and on such appointed or
adjourned date the appellate authority "shall hear such persons
as may appear and, after such further enquiry, if any, as it may
deem necessary, confirm, vary, or set aside the order against which
the appeal is preferred." At page 105 of the report the Court
observed that neither the sections nor the rules framed under the
Act contemplated anything like recording oral or documentary
evidence in the usual way as in courts of law, nor did they contemplate a regular hearing as in a court of justice. The Court also
observed that the provisions of the Act and the Rules did not provide
for any elaborate procedure as to how the parties interested had to be
heard in regard to the question as to who should be granted a stage
carriage permit. This Court held on a consideration of the provisions
of the Act and the Rules that though the appellate authority
had to function in a quasi-judicial capacity but not as a
court of law, it was not required to record oral or documentary
evidence and that the only requirement was that in considering the
rival claims for the stage carriage permits the authority had to
deal with such clai.Jm in a fair and just manner. Similarly, in
Wesrern Indian Match Co. v. Industrial Tribunal, Madras(') this
Court once again stated that the Industrial Tribunal was not bound
by the strict rules of procedure of the Evidence Act and that if
having regard to the fact that the agreement alleged was denied by the
respondents, it came to the conclusion that proof of the agreement
would not really matter, that clearly would be a decision within its
jurisdiction and it would be unreasonable to invoke the prerogative
jurisdiction of the High Court under Art. 226 to overrule or reverse
such a conclusion. As in the present case the dispute between the
parties there was as to the existence of an agreement said to have
been arrived at before the conciliation officer. The Tribunal had
held that the agreement reached between the parties had been recorded by the conciliation officer in some of his letters and so it was
only a matter of construction of those letters and in that view
refused to examine the conciliation officer. It was in connection with
the Tribunal's refusal to examine that officer that this Court made the
aforesaid observations. (See also De Verteuil v. Knaggs & Anr.(2)). It
is thus clear that a refusal to record oral evidence does not necessarily
mean contravention of the rules of natural justice.
Mr. Bishan Narain, however, relied upon two decisions in
General Medical Council v. Spackman(3) and Union of India v.
T. R. Varma (4). In Spackman's case(') a registered medical practi-
(1) (1962) I L.L.J. 629.
(2) (1918) A.C. 557.
(3) (1943) A.C. 627.
(4) [1958) S.C.R. 499.
748
SUPREME COURT REPORTS
[I 967] I S.C.R.
tioner who was a co-respondent in a divorce suit, was held
by the Divorce Court to have committed adultery with Mrs. Pepper,
the respondent therein, with whom he had professional relationship
and a decree nisi was pronounced which was subsequently made
absolute. The
General Medical Council appointed under the
Medical Act, 1958 served upon Spackman a show cause notice why
his name should not be erased from the medical register for infamous
conduct and professional misconduct. At the hearing Spackman's
attorney applied for permission to lead evidence to challenge the
finding of adultery of the Divorce Court which evidence th.ough
available was not produced during the hearing of the Divorce Suit.
The Council rejected the application on the ground that the practice
followed by it did not permit leading of additional evidence and
accepted the decree nisi as primafacie proof of adultery and directed
that the petitioner's name should be removed from the register.
On appeal the House of Lords held that while the Council was
entitled to regard the decree in the divorce suit as prima facie evidence
of adultery, it was bound to hear any evidence tendered by the
practitioner and that having refused to hear such evidence, it had
not made "due inquiry" as cnntemplated by s. 29 of the Act.
It
should be observed that tnis conclusion was based on the provisions
of s. 29 which provided for "due inquiry" and (as is clear from page
645 of the Report) on Rule 9 which, inter a/ia, provided that the
Council shall call upon the practitioner "to state his ca~e and to
produce evidence in support of it." That Ruic also provided that
the practitioner may address the Council either before or at the conclusion of the evidence but only once. It is thus clear that the
Council's order was set aside on the footing that it had failed to hold
"due inquiry" within the, meaning of s. 29 and the said Rule,
as contrary to the pr<;iyisions of that Rule the Council had prevented
Spackman from leading evidence. The decision in Union of India
v. T. R. Varma(') was in connection with an inquiry held under
Art. 31 I of the Constitution. The observations made in that case
therefore would bear no analogy to the inquiry held by the Controller in the instant case. Neither of those two decisions therefore
can help Mr. Bishan Narain.
It is clear from the said consent order that the Controller
was not a judicial tribunal in the sense of a Court of law and though
the inquiry held by him was a qua~i-judicial inquiry it certainly was
not a trial. It was confined to one question only, l'i= .• whether he
should reconsider the order made by him cancelling the allocation
in favour of the appellant company. In order to decide that question he had to ascertain who was to be blamed as between the appellant company and the 6th respondent for non-implementation of his
order dated 1/2 May, 1962.
No doubt the consent order required
him "to hear" the parties.
But it is obvious that the order never
contemplated that he should follow an elaborate procedure and take
(!) [t9SSI s.cR:t99.
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749
oral evidence of witnesses tendered by the parties. The order did
not lay down any such procedure or any procedure at all, with the
consequence that he was left to devise his own procedure. So
long as the procedure devised by him gave a fair and adequate
opportunity to the parties to put forward and explain their respective case such procedure would be sufficient and cannot be challenged
on the ground of any contravention of natural justice. The dispute
between the parties was as to the existence of an oral agreement
under which the 6th respondent was to deliver 4,500 tons of steel
sheets. From that arose the question whether the delivery of 1,238
and odd tons was made under the said alleged agreement or under the
said release orders. It is not disputed that the Controller heard the
parties on the 13th and the 18th December, 1962 and the respective
cases of the parties were put forward before him through counsel
who,· we have no doubt, made their submissions fully. The said
Lalta Prasad was present at the hearing preiumably giving instructions to the company's counsel. He had therefore ample opportunity to put forward the case of the appellant compaay in regard ,to
the said alleged oral agreement. The . parties also produced before
the Controller such correspondence and documents as they thought
proper and necessary to establish their case. There is no doubt
that the letters already referred to above in whiph the appellant company has set out the said alleged agreement were produced before
the ControUer and considered by him. In these circumstances it is
difficult to appreciate what difference it would have made if
Lalta Prasad's
oral testimony had been recorded. The letters
presumably contained all that he had to say in regard to the alleged
agreement arrived at between him and the said Jitpal. Obviously
he could not have added anything to those letters nor could he have
deposed contrary to them. This position seems to have been realised
by the appellant company. It was therefore that though the Controller had rejected the application for recording the evidence of Lalia
Prasad no protest was made by the appellant company or c>n its
behalf at that st&ge. No such protest was also placed on record
between the 18th and 21st December, 1962 when the Controller
declared his order. It was only on the 5th January, 1963 that the
attorneys of the appellant company complained for the first time
about the Controller's decision rejecting the application to record
Lalta Prasad's evidence alleging that the said order . of the
Controller was ma/a fide.
The appellant company f.:~d the present
writ petition on January 7, 1963. It would appear from these facts
that the grievance of Lalta Prasad not being allowed to give evidence was made in the letter of the 5th January, 1963 to bolster up
the case in the proposed writ petition that the said order of the Controller was perverse and ma/a fide.
It is true that the Controller
rejected the appellant company's case about the said oral agreement
on the ground that the correspondence indicated that it had been
putting up its case inconsistently. It may perhaps be said that if
759
SUPllBMB COUil T llEPOR. TS
(1967] I S.C.R.
Latta Prasad had been examined he might have explained the in-
<:<>nsistency.
But as already stated Lalta Prasad had ample opportunity through his counsel to explain the said inconsistency. If
that inconsistency had been explained by the company's counsel
during the hearing it cannot be doubted that the Controller would
have considered such explanation tendered by counsel. That being
so, the refusal of the Controller to record Lalta Prasad's evidence
cannot be said to have precluded the company from offering an explanation of the said inconsistency. Nor can it be said that the
refusal amounted to any breach of natural justice. Since the procedure for inquiry was left to be devised by the Controller and the
procedure followed by him was not in any way in contravention of
the said consent order nor contrary to natural justice the contention
urged by Mr. Bishan Narain must be rejected.
The next contention of Mr. Bishan Narain was that on the
question of refund of the excess charges the impugned order suffered
from an error of law apparent on the record.
The question is what
is an error of law apparent on the record. In Champsey Bhara &
Co. v. Jira) Pa/le Spinning and Weaving Co.(1).
Lord Dunedin observed that an error on the face of an award means that the
court must first find whether there is any legal proposition which is
the basi~ of such an award. He also said that where an award is
challenged upon such a ground it is not permissible to read words
into it or to draw inferences and the award or the order must be
taken as it stands. Tucker J. said the same thing in James Clark
(Brush Materials) Ltd v. Carters (Marchants) Ltd. (2) Reading the impugned order it is difficult to say what legal proposition it contains in
respect of which it can be said that there is an error of law apparent
on the record. The issue before the Controller was whether in refusing to give the refund of the said excess the 6th respondent was
guilty of obstructing the implementation of the order elated May
1/2, 1962 or of preventing the appellant company from taking delivery of the said goods. It is true that the Controller had on more
then one occasion directed the 6th respondent to deduct the
said excess from its pro forma invoice and the 6th respondent had
in fact expressed its willingness to duduct it. The dispute between the
the parties was within a circumscribed compass viz., whether the
appellant company should first withdraw the suit. The appellant
company would not withdraw the suit and hence the controversy.
But then it is not possible to say that there was no difficulty in the
way of the 6th respondent in deducting straightaway the said excess
from its invoice, for, as already stated, the appellant company,
had stated different sums of such excess at different times. The
Controller had not fixed the exact amount of the said excess and had
not directed as to when and on what condition the appellant company's suit should be withdrawn. If in these circum~tances the
Controller finds that the appellant company would not ha"e insisted
(I) (19:z:i) A.C. ol&J.
(2) (1944! I K.B. S6G
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BHARAT BARREL CO. V. L. K. BOSE (Shelat, /.)
751
on the deduction before withdra~ng its suit, even if a court were
to come to a different conclusion it certainly is not a case of an error
apparent on the face of the record.
That takes us to the third and the last contention, viz., that
the impugned order that the appellant company wanted to pick and
choose was without evidence. The order was based on the finding
that it was for the first time in its letter dated May 8, 1962 that the
appellant company claimed that it would only accept goods of
standard and merchantable quality. That conclusion, in our view,
cannot be said to be without evidence. As explained by the High
Court, the appellant company, no doubt, had in its letter of April 23,
1962 claimed survey and inspection but that letter does not show that
the. appellant company was not willing to accept the goods in the
condition in which they were in the 6th respondent's godown.
The demand for inspection and survey was made wiih a view to
claim rebate in the eventofthegoods being found either rusty or in
damaged condition. But in the letter of May 8, 1962 it would seem
that the appellant company stiffened its attitude and laid down the
condition that it would accept such of the goods only as were of
standard and merchantable quality. As already stated, Jong before
May 8, 1962 the appellant company was well aware that the goods
had become rusted as they were lying for a long time in the godown.
Even the 6th respondent had complained that the goods were getting
rusted. Yet, at no time before May 8, 1962 the appellant company
had insisted that it would accept only those goods which were of
standard and merchantable quality. It may perhaps be that the
Controller could have taken the view that since the appellant company required the goods for manufacturing barrels, it was entitled
to have goods of merchantable quality. At the same time it is
also possible to take a different view, viz., that the appellant company could have abided by the Controller's directions in his order
dated 1/2 May 1962 and could have accepted delivery under protest
and if necessary claimed damages. But merely because there was
the possibility of two views befog taken it would not be possible to say,
as was contended in the High Court, that the order was perverse.
In any event, since it was for the first time in its letter of May 8,
1962 that the aforesaid demand was made by the appellant company
it is impossible to say that this part of the order was without any
evidene<! and therefore liable to be quashed.
These were the only contentions raised on behalfoftheappcllant
company. For the reasons aforesaid it is not possible to uphold
any one of them. The result is that the appeal fails and is dismissed.
It appears to us, looking at the entire record of the case that the 6th
respond~nt also was not altogether free from blame.
In the circumstances, we decline to make any order as to costs.
Each party
therefow will bear its own costs.
G.C.
· Appea1 dismissed.