Understanding the Nature and Scope of Administrative Law

Table of Contents

1. Meaning, Scope & Need of Administrative Law
2. Administrative Discretion
3. Remedies Against Arbitral/Abuse of Administrative Actions
4. Principles of Natural Justice
5. Government Contract

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Study of Administrative law involves analysis of the institutions and legal rules through which governmental decision-making is authorized, affected, limited and reviewed. In order to meet the growing needs of changing social, political and economic paradigm, this branch of law i.e. Administrative Law is necessary. 

Administrative law is that branch of law that deals with powers, functions and responsibilities of various organs of the state.

1. Nature and Scope of Administrative Law

1.1 Meaning of Administrative Law

Administrative Law is that branch of law that deals with powers, functions & responsibilities of various organs of the State. There is no single universal definition of ‘administrative law’ because it means different things to different theorists.

K. C. Davis defines Administrative Law is the law concerning the powers and procedures of administrative agencies, including especially the law governing the judicial review of administrative action.

Administrative law is the branch of the law governing the relationship between the individual and the executive branch of the government when the latter acts in its administrative capacity.

Ivor Jennings defined administrative law as the law relating to administration. It determines the organization, powers and duties of administrative authorities.

Administrative law deals with the powers of administrative authorities the manner in which the powers are exercised and the remedies which are available to the aggrieved persons, when those powers are abused by these authorities.

Primary function of administrative law is to keep governmental powers within the limits of law and to protect private rights and individual interests.

Rule-making power (delegated legislation) and an authority to decide (Tribunal/Court) are described as effective and powerful weapons in the armory of administration.

As Wade observed, all power have two inherent characteristics:

(i) They are not absolute or unfettered.

(ii) They are likely to be abused.

Administrative law attempts to control the power of the government, and its instrumentalities and agencies. To achieve that objective, administrative law provides an effective mechanism and adequate protection. It helps to strike between two conflicting force:

(i) Individual rights

(ii) Public interest.

1.2 Scope of Administrative Law

Administrative law determines the organization, powers and duties of administrative authorities. Emphasis of Administrative Law is on procedures for formal adjudication based on the principles of Natural Justice and for rule making.

Concept of Administrative Law is founded on the following principles:

(a) Power is conferred on the administration by law.

(b) No power is absolute or uncontrolled howsoever broad the nature of the same might be.

(c) There should be reasonable restrictions on exercise of such powers depending on the situation.

Though administrative law is as old as administration itself since they cannot exist separately, in India the early signs/existence of administrative law could be found in the treatises written during the reign of the Mauryas, Guptas, Mughals as well as East India Company.

It is based on the concept of rule of law that supports Natural Justice i.e. adjudication based on impartiality, unjustness and the prescribed laws and legal methods instead of arbitrariness and abuse of official power. Natural justice is basically applied in cases where there are no laws prescribed, here the individual has to be given an opportunity to be heard and the judgment is to be taken into consideration the particular facts and cases of the case and the judgment should be free from bias. It is to prevent violation of people’s rights by officials in power.

Administrative law specifies the rights and liabilities of private individuals in their dealings with public officials and also specifies the procedures by which those rights and liabilities can be enforced by those private individuals. It provides accountability and responsibility in the administrative functioning. Also there are specified laws and rules and regulations that guide and direct the internal administration relations like hierarchy, division of labour etc.

1.3 Need for Administrative Law

Modern state typically has three organs –

• Legislative
• Executive and
• Judiciary.

Traditionally, the legislature was tasked with the making of laws, the executive with the implementation of the laws and judiciary with the administration of justice and settlement of disputes. However, this traditional demarcation of role has been found wanting in meeting the challenges of present era. The legislature is unable to come up with the required quality and quantity of legislations because of limitations of time, the technical nature of legislation and the rigidity of their enactments. The traditional administration of justice through judiciary is technical, expensive and dilatory. The states have empowered their executive (administrative) branch to fill in the gaps of legislature and judiciary. This has led to an all pervasive presence of administration in the life of a modern citizen. In such a context, a study of administrative law assumes great significance.

The ambit of administration is wide and embraces following elements within its ambit:

• • It makes policies.
  • It executes, administers and adjudicates the law.
  • It exercises legislative powers and issues rules, bye laws and orders of a general nature.

The ever-increasing administrative functions have created a vast new complex of relations between the administration and the citizen. The modern administration is present everywhere in the daily life of an individual and it has assumed a tremendous capacity to affect their rights and liberties.

Since the whole purpose of bestowing the administration with larger powers is to ensure a better life for the people, it is necessary to keep a check on the administration, consistent with the efficiency, in such a way that it does not violate the rights of the individual. There is an age-old conflict between individual liberty and government control there must be a constant vigil to ensure that a proper balance be evolved between private interest and government which represents public interest. It is the demand of prudence that when large powers are conferred on administrative organs, effective control-mechanism be also evolved so as to ensure that the officers do not use their powers in an undue manner or for an unwarranted purpose. It is the task of administrative law to ensure that the governmental functions are exercised according to law and legal principles and rules of reason and justice.

The goal of administrative law is to ensure that the individual is not at receiving end of state’s administrative power and in cases where the individual is aggrieved by any action of the administration, he or she can get it redressed. There is no antithesis between an effective government and controlling the exercise of administrative powers. Administrative powers are exercised by thousands of officials and affect millions of people. Administrative efficiency cannot be the end-all of administrative powers and the interests of people must be at the centre of any conferment of administrative power. If exercised properly, the vast powers of the administration may lead to the welfare state; but, if abused, they may lead to administrative despotism and a totalitarian state.

A careful and systematic study and development of administrative law becomes a desideratum as administrative law is an instrument of control on the exercise of administrative powers.

1.4 Constitutional Law vs. Administrative Law: Understanding the Key Differences

Points	Constitutional Law	Administrative Law
Meaning	Constitutional law is the body of law that evolves from a constitution, setting out the fundamental right and duties for its citizens and also the principles according to which a State is governed and defining the relationship between the various branches of government within the State.	Administrative Law is the law concerning the powers and procedures of administrative agencies, including especially the law governing the judicial review of administrative action.
Class	Constitutional law is genus. It is the mother of all law of India.	Administrative law is a species of the Constitutional Law.
Deals with	Constitutional law deals with various organs of the State. It also deals with structure of the State.	Administrative law deals with those organs as in motion/function. Thus, it deals with functions of the State.
Superiority	Constitutional law is the supreme and highest law in the country.	Administrative law is subordinate to Constitutional Law.
Type	Constitutional law is theoretical one.	Administrative law is practical and functional.

1.5 Sources of Administrative Law

Administrative law principles and rules are to be found in many sources. Followings are the main sources of administrative law in India.

1.5.1 Constitution of India

It is the primary source of administrative law. Article 73 of the Constitution provides that the executive power of the Union shall extend to matters with respect to which the Parliament has power to make laws. Similar powers are provided to States under Article 62. Indian Constitution has not recognized the doctrine of separation of powers in its absolute rigidity. The Constitution also envisages tribunals, public sector and government liability which are important aspects of administrative law.

1.5.2 Acts/Statutes

Acts passed by the Central and State Governments for the maintenance of peace and order, tax collection, economic and social growth empower the administrative organs to carry on various tasks necessary for it. These Acts list the responsibilities of the administration, limit their power in certain respects and provide for grievance redressal mechanism for the people affected by the administrative action.

1.5.3  Ordinances, Administrative directions, notifications and Circulars

Ordinances are issued when there are unforeseen developments and the legislature is not in session and therefore cannot make laws. The ordinances allow the administration to take necessary steps to deal with such developments. Administrative directions, notifications and circulars are issued by the executive in the exercise of power granted under various Acts.

1.5.4 Judicial decisions

Judiciary is the final arbiter in case of any dispute between various wings of government or between the citizen and the administration. In India, we have the supremacy of Constitution and the Supreme Court is vested with the authority to interpret it. The courts through their various decisions on the exercise of power by the administration, the liability of the government in case of breach of contract or tortuous acts of Governments servants lay down administrative laws which guide their future conduct.

2. Administrative Discretion

Discretion in layman’s language means choosing from amongst the various available alternatives without reference to any predetermined criterion, no matter how fanciful that choice may be.

A person writing his will has such discretion to dispose of his property in any manner, no matter how arbitrary or fanciful it may be. But the term “discretion” when qualified by the word “administrative” has somewhat different overtones. ‘Discretion’ in this sense means choosing from amongst the various available alternatives, but with reference to the rules of reason and justice and not according to personal whims. Such exercise is not to be arbitrary, vague and fanciful but legal and regular.

Thus, in short, the decision is taken by the authority not only on the basis of the evidence but in accordance with policy or expediency and in exercise of discretionary powers conferred on that authority.

Conferment of discretion

Discretion is conferred in the area of rule-making or delegated legislation e.g. when the statutory formula says that the government may makes rules which it thinks expedient to carry out the purposes of the Act. In effect, a broad discretion and choice are being conferred on the government to make rules. Similarly, discretion is conferred on adjudicatory and administrative authorities on a liberal basis, that is, the power is given to apply a vague statutory standards from case to case.

Rarely does the legislature enact a comprehensive legislation complete in all details. More often the legislation is sketchy or skeleton, leaving many gaps and conferring powers on the administration to act in a way it deems “necessary” or “reasonable” or if it “is satisfied” or “is of opinion”.

Need of discretion

Because of the complexity of socio-economic conditions which the administration in modern times has to contend with, it is realized that a government having only ministerial duties with no discretionary functions will be extremely rigid and unworkable and that, too some extent, officials must be allowed a choice as to when, how, and whether they will act. The reason for this attitude is that, more often than not, the administration is required to handle intricate problems which involve investigation of facts, making of choices and exercise of discretion before deciding upon what action to take. Thus, the modern tendency is to leave a large amount of discretion with various authorities.

In S. Kandaswamy Chettiar  v.  State of  Tamil Nadu, the Maharashtra Vacant Lands (Prohibition of Unauthorized Occupation & Summary Eviction) Act, 1955, which was passed for prohibiting unauthorized occupation of vacant lands and for providing summary eviction of unauthorized occupants, conferred upon the competent authority the discretion to declare a land as vacant land without laying down any policy as a guidance for the exercise of such discretion. The Act was therefore held to be violative of Article 14.

2.1 Judicial control over administrative actions

Administrative organs have wide powers and their exercise of discretion can be vitiated by a number of factors. Therefore, the government must also provide for proper redressed mechanism.

In India the modes of judicial control of administrative action can be conveniently grouped into following three heads:

2.1.1 Constitutional

The Constitution of India is supreme and all the organs of state derive their existence from it. Indian Constitution expressly provides for judicial review. Consequently, an Act passed by the legislature is required to be in conformity with the requirements of the Constitution and it is for the judiciary to decide whether or not that Act is in conformity with the Constitutional requirements.

If it is found in violation of the Constitutional provisions the Court has to declare it unconstitutional and therefore, void.

2.1.2  Statutory Review

The method of statutory review can be divided into two parts:

(i) Statutory Appeals: There are some Acts, which provide for an appeal from statutory tribunal to the High Court on point of law. E.g. Section 30 of the Employees Compensation Act, 1923.

(ii) Reference to the High Court or statement of case: There are several statutes, which provide for a reference or statement of case by an administrative tribunal to the High Court. Under Section 256 of the Income-tax Act, 1961 where an application is made to the Tribunal by the assessee and the Tribunal refuses to state the case the assessee may apply to the High Court. If the High Court is satisfied about the incorrectness of the decision of the Tribunal, it can require the Tribunal to state the case and refer it to the High Court.

2.1.3 Ordinary or Equitable

Apart from the remedies as discuss above there are certain ordinary remedies, which are available to person against the administration, the ordinary courts in exercise of the power provide the ordinary remedies under the ordinary law against the administrative authorities. These remedies are also called equitable remedies and include:

(a) Injunction

(b) Declaratory Action

(c) Action for damages.

2.2 Judicial Review

• • Biggest check over administrative action is the power of judicial review.
  • Judicial review is the authority of Courts to declare void the acts of the legislature and executive, if they are found in violation of provisions of the Constitution.
  • Judicial Review is the power of the highest Court of a jurisdiction to invalidate on Constitutional grounds, the acts of other Government agency within that jurisdiction.
  • The doctrine of judicial review has been originated and developed by the American Supreme Court, although there is no express provision in the American Constitution for the judicial review. The judicial review is not an appeal from a decision but a review of the manner in which the decision has been made. The judicial review is concerned not with the decision but with the decision making process.
  • Power of judicial review controls not only the legislative but also the executive or administrative act. The Court scrutinizes the executive act for determining the issue as to whether it is within the scope of authority or power conferred on the authority exercising the power. Where the act of executive or administration is found ultra virus the Constitution or the relevant Act, it is declared void. The Courts attitude appears to be stiffer in respect of discretionary powers of the executive or administrative authorities.
  • The Court is not against the vesting of discretionary power in the executive, but it expects that there would be proper guidelines for the exercise of power. The Court interferes when the uncontrolled and unguided discretion is vested in the executive or administrative authorities or the repository of the power abuses its discretion.
  • In Mansukhlal Vithaldas Chauhan v.  State of Gujarat, the Supreme Court held that while exercising the power of judicial review it does sit as a Court of appeal but merely reviews the manner in which the decision was made, particularly as the Court lacks the expertise to correct the administrative decision and if a review of the administrative decision is permitted, it will be substituting its own decision which itself may be fallible. The Court is to confine itself to the question of legality. Its concern should be:

– Whether a decision making authority exceeding its power?
– Committed an error of law?
– Committed a breach of rules of natural justice?
– Reached a decision which no reasonable tribunal would have reached, or
– Abused its power?

Judicial review is exercised at two stages:

(i) At the stage of delegation of discretion: Any law can be challenged on the ground that it is violative of the Constitution and therefore laws conferring administrative discretion can thus also be challenged under the Constitution.

(ii) At the stage of exercise of administrative discretion: No law can clothe administrative action with a complete finality. The Courts can always examine the ambit and even the mode of its exercise discretion to check its conformity with fundamental rights. The courts in India have developed various formulations to control the exercise of administrative discretion, which can be grouped under two broad heads, as under:

1. 1. 1. Authority has not exercised its discretion properly – ‘abuse of discretion’.
      2. Authority is deemed not to have exercised its discretion at all – ‘non-application of mind’.

2.3 Administrative Discretion and Article 14

Article 14 of the Constitution of India provides that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.

Article 14 provides for equality before law. It prevents arbitrary discretion being vested in the executive. Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. Right to equality affords protection not only against discretionary laws passed by legislature but also prevents arbitrary discretion being vested in the executive. Often executive or administrative officer of government is given wide discretionary power.

In a number of cases, the statute has been challenged on the ground that it conferred on an administrative authority wide discretionary powers of selecting persons or objects discriminately and therefore it violated Article 14.

The Court in determining the question of validity of such statute examines whether the statute has laid down any principle or policy for the guidance of the exercise of discretion by the government in the matter of selection or classification. The Court will not tolerate the delegation of uncontrolled power in the hands of Executive to such an extent as to enable it to discriminate.

In State of West Bengal v. Anwar Ali, it was held that in so far as the Act empowered the Government to have cases or class of offences tried by Special Courts, it violated Article 14 of the Constitution. The Court further held the Act invalid as it laid down “no yardstick or measure for the grouping either of persons or of cases or of offences” so as to distinguish them from others outside the purview of the Act. Moreover, the necessity of “speedier trial” was held to be too vague, uncertain and indefinite criterion to form the basis of a valid and reasonable classification.

2.4 Administrative Discretion and Article 19

Article 19 guarantees certain freedoms to the citizens of India, but they are not absolute. Reasonable restrictions can be imposed on these freedoms under the authority of law. The reasonableness of the restrictions is open to judicial review. These freedoms can also be afflicted by administrative discretion.

A number of cases have come up involving the question of validity of law conferring discretion on the executive to restrict the right under Article 19(1)(b) & 19(1)(e) [the right to assemble peacefully and without arms and the right to reside and settle in any part of the territory of India]. The government has conferred powers on the executive through a number of laws to extern a person from a particular area in the interest of peace and safety.

The Supreme Court in H.R. Banthis v. Union of India, declared a licensing provision invalid as it conferred an uncontrolled and unguided power on the executive. The Gold (Control) Act, 1968, provided for licensing of dealers in gold ornaments. The Administrator was empowered under the Act to grant or renew licenses having regard to the matters, inter alia, the number of dealers existing in a region, anticipated demand, suitability of the applicant and public interest. The Supreme Court held that all these factors were vague and unintelligible. The term ‘region’ was nowhere defined in the Act. The expression ‘anticipated demand’ was vague one. The expression ‘suitability of the applicant’ and ‘public interest’ did not contain any objective standards or norms.

Where the Act provides some general principles to guide the exercise of discretion and thus saves it from being arbitrary and unbridled, the court will uphold it, but where the executive has been granted unfettered power to interfere with the freedom of property or trade and business, the Court will strike down such provision of law.

2.5 Control over exercise of administrative discretion

No law can clothe administrative action with a complete finality. The courts in India have developed various formulations to control the exercise of administrative discretion, which can be grouped under two broad heads, as under:

1. 1. Authority has not exercised its discretion properly – ‘Abuse of discretion’.
   2. Authority is deemed not to have exercised its discretion at all – ‘non-application of mind’.

2.6 Abuse of discretion

(i) Mala fides (bad faith): If the discretionary power is exercised by the authority with bad faith or dishonest intention, the action is quashed by the Court.

Mala fide (bad faith) may be taken to mean dishonest intention or corrupt motive. In relation to the exercise of statutory powers it may be said to comprise dishonesty, fraud and malice. A power is exercised fraudulently if its repository intends to achieve an object other than that for which he believes the power to have been conferred. The intention may be to promote another public interest or private interest.

Example 1: In Partap Singh v. State of Punjab, the Supreme Court, by a majority judgment, set aside an order of suspension and departmental proceedings against a Civil Surgeon on the ground that the order of the Government was made at the instance of Chief Minister who had grudge against the appellant.

Example 2: In State of Punjab v. Gurdial Singh, the land acquisition proceedings for acquiring the land of the petitioner for building a Mandi were challenged on the grounds that they were mala fide. It was alleged that the proceedings were initiated as a result of the influence wielded by a minister who was related to the owner of the land which was sought to be acquired initially and then dropped. In absence of any affidavit by the minister denying the allegations, the court held that proceedings mala fide.

(ii) Irrelevant considerations: If the exercise of a discretionary power has been influenced by considerations that cannot lawfully be taken into account, or by the disregard of relevant considerations, a court will normally hold that the power has not been validly exercised. Thus, a discretionary power must be exercised on relevant and not irrelevant or extraneous considerations. If the authority concerned pays attention to, or take into account wholly irrelevant or extraneous circumstances, events or matters then the administrative action is ultra vires and will be quashed.

Example: In State of M.P. v. Ramshankar, services of a teacher were terminated on the basis of the police report that in the past, he had taken part in RSS and Jan Sangh activities. It was held that earlier political affinities of a government servant provided no basis for the government to terminate his services in a democratic republic like India.

(iii) Leaving out relevant considerations: The administrative authority exercising the discretionary power is required to take into account all the relevant facts. If it leaves out relevant consideration, its action will be invalid.

(iv) Arbitrary orders: The order made should be based on facts and cogent reasoning and not on the whims and fancies of the adjudicatory authority.

Example 1: In Ranjit Singh v. Union of India, the petitioner had been carrying on the business of manufacturing guns for a number of years. His quota to manufacture guns was considerably reduced by the Government. The justification given was that the industrial Policy Resolution of 1956 envisaged a monopoly in the Central Government for manufacturing arms and ammunitions. The Court said, “any curtailment of quota must necessarily proceed on the basis of reason and relevance. In determining the quota of a manufacturing unit, the relevant considerations were the production capacity of the factory, the quality of the guns produced and the economic viability of the unit on the one hand and the requirements of current administrative policy pertinent to the maintenance of law and order and internal security on the other hand. These factors were impliedly read by the court into the statute. Since, the Government had left out these relevant considerations, its action was held to be arbitrary.

Example 2: In Tata Cellular v. Union of India, the Supreme Court has held that the right to refuse the lowest or any other tender is always available to the Government but the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down.

(v) Improper purpose: The discretionary power is required to be used for the purpose for which it has been given. If it is given for one purpose and used for another purpose it will amount to abuse of power.

Example: In Sydney Municipal Corporation v. Compbell, the council had statutory power to compulsory land requisition “for carrying out improvements in or remodeling any portion of the city.” When the council attempted to use its power to acquire land for the purpose of benefiting for an anticipated increase in the value of the land, it was restrained.

(vi) Colourable exercise of power: Colourable exercise means that under the “colour” or “guise” of power conferred for one purpose, the authority is seeking to achieve something else which it is not authorized to do under the law in question.

(vii) Non-compliance with procedural requirements: If the procedural requirement laid down in the statute is mandatory and it is not complied, the exercise of power will be bad. Whether the procedural requirement is mandatory or directory is decided by the Court. Principles of natural justice are also required to be observed.

(viii) Exceeding jurisdiction: An administrative authority is required to exercise discretion within the limits of the statute. An action or decision going beyond what is authorized by law is ultra-vires.

For example, if the administrative authority is empowered to control the price of bread it will be in excess of its jurisdiction to control the price of butter or if an officer is empowered to grant loan of ` 10,000 in his discretion for a particular purpose and if he grants a loan of ` 20,000, he exceeds the power and the entire order is ultra-vires and void on that ground.

Example 1: In case of J.K. Chaudhary v. R.K. Datta, the governing body of a college dismissed the principal, but the university concerned directed to reinstate him. Under the relevant statute the university could interfere with the decision of the governing body as in case of a ‘teacher’ which termed as interpreted by the Supreme Court did not include the Principal. The university therefore acted without jurisdiction.

Example 2: In Calcutta Electricity Supply Corporation v. Workers Union, the relevant regulation empowered the management to award a claim for medical aid of employees, it will be exceeding in its jurisdiction in granting the said benefit to the family members of the employees.

2.7 Non-application of mind

(i) Acting under dictation: Where the authority exercises its discretionary power under the instructions or dictation from superior authority it is taken as non-exercise of power by the authority and its decision or action is bad. In such condition the authority purports to act on its own but in substance the power is not exercised by it but by the other authority. The authority entrusted with the powers does not take action on its own judgment and does not apply its mind.

Example: In Commissioner of Police v. Gordhandas Bhanji, the Police Commissioner empowered to grant license for construction of cinema theatres, granted the license but later cancelled it on the discretion of the Government. The cancellation order was declared bad as the Police Commissioner did not apply his mind and acted under the dictation of the Government.

(ii) Self restriction: If the authority imposes fetters on its discretion by announcing rules of policy to be applied by it rigidly to all cases coming before it for decision, its action or decision will be bad. The authority entrusted with the discretionary power is required to exercise it after considering the individual cases and the authority should not imposes fetters on its discretion by adopting fixed rule of policy to be applied rigidly to all cases coming before it.

(iii) Acting without due care: Non-application of mind to an issue that requires an exercise of discretion on the part of the authority will render the decision bad in law.

3. Remedies Against Arbitral/Abuse of Administrative Actions

Courts in exercise of the power provide the ordinary remedies under the ordinary law against the administrative authorities. These remedies are also called equitable remedies and include:

(a) Injunction (Preventive Relief)
(b) Declaratory Action
(c) Action for damages.

3.1 Preventive Relief

Preventive relief means preventing a person from doing such things or act, which he is under an obligation not to do.

It is directed to prevent the violation of negative act and therefore it is called as preventive relief. The power upon Courts to prevent and to restrain is absolutely necessary for effective administration of justice.

Preventive relief is granted at the discretion of the Court by injunctions – temporary or perpetual.

3.2 Injunction

• • Where a person is in breach of his obligation i.e. where he is doing something which he is under obligation not to do, the Court may by issue of an order, restrain him from doing it. Such an order of the Court is known as injunction.
  • An injunction is a preventive remedy. It is a judicial process by which one who has invaded or is threatening to invade the rights of another is restrained from continuing or commencing such wrongful act.
  • Injunction is issued for restraining a person to act contrary to law or in excess of its statutory powers.
  • An injunction can be issued to both administrative and quasi-judicial bodies.
  • Injunction is highly useful remedy to prevent a statutory body from doing an ultra vires act, apart from the cases where it is available against private individuals e.g. to restrain the commission or torts, or breach of contract or breach of statutory duty. Injunction may be prohibitory or mandatory.

3.3 Prohibitory Injunction

Prohibitory injunction forbids the defendant to do a wrongful act, which would infringe the right of the plaintiff.

A prohibitory injunction may be:

(a) Temporary or interlocutory injunction
(b) Perpetual injunction.

3.4 Temporary or Interlocutory Injunction

• • Temporary injunctions are such as to continue until a specified time or until the further order of the court.
  • It is granted as an interim measure to preserve status quo until the case is heard and decided.
  • Temporary injunction may be granted at any stage of a suit.
  • Temporary injunctions are regulated by the Code of Civil Procedure, 1908 and are provisional in nature. It does not conclude or determine a right.
  • A temporary injunction is a mere order. The granting of temporary injunction is a matter of discretion of the Court.
  • The purpose of a temporary injunction is to maintain the status quo and prevent irreparable damage or preserve the subject matter of the litigation until the trial is over. After the trial, the Court may issue a permanent injunction or dissolve the temporary injunction.
  • It is a provisional remedy granted to temporarily curb activity until the court can make a final decision after trial.

Court may grant temporary injunction to restrain any such act (as set out below) or make such other order for the purpose of staying and preventing the wasting, damaging, alienation or sale or removal or disposition of the property or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit; where it is proved by affidavit or otherwise:

– That any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree.
– That the defendant threatens, or intends to remove or dispose of his property with a view to defrauding his creditors.
– That the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit.
– It would be necessary for the plaintiff to satisfy the Court that substantial and irreparable harm or injury would be suffered by him if such temporary injunction (till the disposal of the suit) is not granted and that such loss or damage or harm cannot be compensated by damages.

3.5 Perpetual Injunction

• • A perpetual or permanent injunction is a type of order issued by a Court after a full trial on the merits of a case has been conducted.
  • A permanent injunction order is typically issued for the purpose of requiring a person or entity to permanently stop acting in a certain manner.

3.6 Temporary Injunction & Perpetual Injunction: Understanding the Key Differences

Points	Temporary Injunction	Perpetual Injunction
Meaning	A temporary injunction is a Court Order prohibiting an action until there has been a trial or other Court action.	A perpetual injunction is a type of order issued by a Court after a full trial on the merits of a case has been conducted.
Nature	A temporary injunction is provisional in nature as it does not conclude or determine a right.	Perpetual injunction is permanent in nature as it determines a right on merits of the suit.
Governing Statue	Temporary injunctions also known as interlocutory and are granted under the Civil Procedure Code 1908.	Perpetual injunctions are granted under Section 38 of the Specific Relief Act, 1963.
Stage of Granting	It is granted before plaintiff establishing his case at the trial and continues up to a specified time.	Perpetual injunction can be granted only after hearing the defendant and upon the merits of the suit.
Replacement	Temporary injunction may be replaced by perpetual injunction on merits of the case.	Perpetual injunction cannot be replaced by temporary injunction.

3.7 Mandatory Injunction

When to prevent the breach of an obligation it is necessary to compel the performance of certain acts which the Court is capable of enforcing, the Court may in its discretion grant an injunction to prevent the breach complained of and also to compel performance of the requisite acts. The mandatory injunction may be taken as a command to do a particular act to restore things to their former condition or to undo, that which has been done. It prohibits the defendant from continuing with a wrongful act and also imposes duty on him to do a positive act.

Example: X threatens to publish statements concerning Y which would be punishable under the Indian Penal Code, 1860. The Court may grant an injunction to restrain the publication, even though it may be shown not to be injurious to Y.

3.8 Declaratory Action

In some cases where wrong has been done to a person by an administrative act, declaratory judgments may be the appropriate remedy. Declaration may be taken as a judicial order issued by the Court declaring rights of the parties without giving any further relief. Thus, a declaratory decree declares the rights of the parties. In such a decree there is no sanction, which an ordinary judgment prescribes against the defendant. By declaring the rights of the parties it removes the existing doubts about the rights and secures enjoyment of the rights. It is an equitable remedy. It is a discretionary remedy and cannot be claimed as a matter of right.

Law relating to declaratory decree is contained in Sections 34 & 35 of the Specific Relief Act, 1963 which are discussed below:

Discretion of court as to declaration of status or right [Section 34]: The Court may grant a declaratory decree in favour of plaintiff when the plaintiff satisfies the Court as to the following:

– That he is entitled to a legal character or right to property.
– He will also have to prove that the defendant is either denying, or interested to deny his title to such character or right.

The declaration cannot be sought on speculative grounds.

When Court refuses to grant declaratory decree: The Court will refuse to grant a declaratory decree where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.

Instances of legal status are:

– Status of an adopted son
– Priest of a temple
– Legal character by marriage
– Legitimacy or illegitimacy
– Divorce on the ground of impotency

Effect of declaration [Section 35]: A declaration is binding only on:

– The parties to the suit,
– Persons claiming through them respectively, and
– Where any of the parties are trustees, on the persons for whom, if in existence at the date of the declaration, such parties would be trustees.

Such declaratory decrees are not judgments-in-rem and as such cannot bind strangers.

Example: What is the legal remedy available to a property owner if neighboring inhabitants claim a right of way across their land?

Any person entitled any legal character or to any right as to any property may institute a suit against any person denying or interest in denying his title to such character or right and the Court may in its discretion make there in declaration that he is so entitled. Thus, property owner may sue for a declaration that the inhabitants of neighboring village are not entitled to the right so claimed.

3.9 Action for damages

If any injury is caused to an individual by wrongful or negligent acts of the Government servant, the aggrieved person can file suit for the recovery of damages from the Government concerned.

4. Principles of Natural Justice

4.1 No person should be made a judge in his own cause

• • It is a fundamental principle that no man shall be a judge of his own cause. The principle is that a Judge is disqualified from determining any case in which he may, or may fairly be suspected to have an interest in the subject matter. The underlying principle is that ‘justice should not only be done, but should manifestly and undoubtedly be seen to be done.
  • The first requirement is that the Judge should be impartial and natural and must be free from bias. One cannot act as judge of a cause in which he himself has some interest either pecuniary or otherwise as it affords the strongest proof against neutrality. One must be in a position to act judicially and to decide the matter objectively. If the judge is subject to bias in favour of or against either party to the dispute or is in a position that a bias can be assumed, he is disqualified to act as a judge and the proceedings will be vitiated. It is a well settled principle of law that justice should not only be done but manifestly and undoubtedly be seen to be done.

Example: In the case of A. K. Kraipak v. Union of India, the facts show that one of the members of a selection board constituted to make the selection to a Central cadre, was also a candidate for the interview. After the interview, the name of the candidate appeared at the top of the list. This was challenged as infringing the principles of natural justice. It was held that as the member was one of the persons to be considered for selection it was against all canons of justice to make him judge of his own cause. Though he did not participate in the deliberation of the committee when his name was considered, his presence in the selection board must have had its own impact on the decision of the board. It was also held that it was his interest to keep out his rivals in order to keep his position safe.

4.2 Rule against bias (nemo judex in causa sua)

According to this rule no person should be made a judge in his own cause. Bias means an operative prejudice whether conscious or unconscious in relation to a party or issue. It is a presumption that a person cannot take an objective decision in a case in which he has an interest.

The rule against bias has two main aspects – one, that the judge must not have any direct personal stake in the matter at hand and two, there must not be any real likelihood of bias.

Bias can be of the following three types:

(1) Pecuniary bias
(2) Personal bias
(3) Subject matter bias

4.3 Pecuniary bias

Pecuniary bias, however slight, will vitiate the decision. This is a case where the deciding authority has monitory or proprietary interest in the subject matter.

Example 1: The historical example is the decision of the House of Lords in Dimes v. Grand Junction Canal Co. In this case judgment of Lord Cottonham was set aside since he held shares in the respondent company. It was observed, “no man is to be a judge in his own cause should be held sacred”. It was rightly stated that a pecuniary interest however slight, will disqualify even though it is not proved that the decision is in any way affected.

Example 2: In Visakapatnam Motor Transport Ltd. v. Bangaruraju, the Regional Transport Authority presided over by the District Collector, granted a permit to a co-operative society of which the Collector was the president. The Court set aside the order on the ground that the order of the authority was contrary to the principles of natural justice.

Example 3: In J. Mahopatra & Co. v. State of Orissa, some of the members of the Committee set up for selecting books for educational instructions were themselves authors whose books were also to be considered for selection. The Supreme Court held that the possibility of bias cannot be ruled out.

4.4 Personal bias

Personal bias may arise owing to friendship, personal animosity or near relationship. But it is difficult to say when it will vitiate the order. What is required is taking a decision. Personal animosity will vitiate the order.

Example 1: In P. H. Kalyani v. Air France, Calcutta, it was held that where an enquiry was conducted by an Officer against whom the delinquent employee had earlier given evidence in a criminal proceeding was held incompetent to hold a disciplinary enquiry.

Example 2: In Cottle v. Cottle, the Chairman of the Bench was friend of the wife’s family, who had instituted matrimonial proceedings against her husband and the wife had told the husband that the Chairman would decide the case in her favour. The order was quashed by the Divisional Court.

Example 3: In Meenglass Tea Estate v. Workman, the manager conducted an enquiry against a Workman for the allegation that he had beaten the Manager. It was held that the inquiry was vitiated by personal bias.

4.5 Subject matter bias

A judge may have a bias in the subject matter, which means that he himself is a party, or has some direct connection with the litigation. To disqualify on the ground of bias there must be intimate and direct connection between adjudicator and the issues in dispute. To vitiate the decision on the ground of bias as for the subject matter there must be real likelihood of bias.

Example: In Baidvanath Mahapatra v. State of Orissa, Committee recommended for the Premature retirement of a Government Servant at the age of 50 years. One of the members of the Review Committee who recommended premature retirement of the Appellant was appointed as the Chairman of the Tribunal and confirmed the Order of premature retirement. The Supreme Court held that the Order of the Tribunal was vitiated since the member,

“Who had administratively taken a decision against the Appellant, considered the matter judicially as a Chairman of the Tribunal, thereby he acted as a judge of his own cause”.

4.6 Rule of ‘audi alteram partem’

The second principle of natural justice is audi alteram partem.

Hear the other side is the essence of the principle.

The authority –

– Must not hear one side in absence of other, or
– Must not make decision without hearing the other side.

Being part of natural justice, it was made applicable even to administrative authority adjudicating matter having civil consequences. In practice it is more frequently invoked than the rule against bias. No proposition can be more clearly established than that a man cannot incur the loss of liberty or property for an offence by a judicial proceeding until he has had a fair opportunity of answering the case against him.

Essential ingredients of the rule of fair hearing: Following are the ingredients of the rule of fair hearing:

(a) Right to Notice: Notice is the first limb of a proper hearing. Notice should be definite. It should specify the authority issuing the notice. The notice must give sufficient time to the person concerned to prepare his case. Whether the person concerned has been allowed sufficient time or not depends upon the facts of each case. The notice must be adequate and reasonable. The notice is required to be clear and unambiguous. If it is ambiguous or vague, it will not be treated as reasonable or proper notice.

The Courts insist that sufficient time should be given to the person against whom action is proposed to be taken to prepare his defence. The Court has struck down a notice which stated that an enquiry would be held in the next morning. Notice need not be reissued if the concerned party acquires knowledge of the proceeding and appears before the authority. But if the statute specifically provides for a notice the proceeding may be struck down for failure to issue the notice.

Example 1: In R v. University of Cambridge, Dr. Bentley was deprived of his degrees by the Cambridge University on account of his alleged misconduct without giving any notice or opportunity of hearing. The Court of King’s Bench declared the decision as null and void.

Example 2: In Swadeshi Cotton Mills v. Union of India, taking over the management of a company by the Government without proper notice or hearing was held to be bad and contrary to law.

(b) Right to present case and evidence: The party against whom proceedings have been initiated must be given full opportunity to present his or her case and the evidence in support of it. The reply is usually in the written form and the party is also given an opportunity to present the case orally.

The question whether hearing to be effective, a personal hearing to be given or only an opportunity to file an explanation is sufficient deserves attention. Hearing does not ordinarily include a personal hearing unless the statute expressly or impliedly indicates so. The Supreme Court spoke in favour of personal hearing in Travancore Rayons v. Union of India. The Court expressed the view that if personal hearing was given in cases involving complex and difficult questions, it would conduce to better administration and more satisfactory disposal of the grievances of citizens.

(c) Right to rebut adverse evidence: Principle of natural justice also requires that every party shall have the right to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross examination as may be required for a full and true disclosure of the facts.

For the hearing to be fair the adjudicating authority is not only required to disclose to the person concerned the evidence or material to be taken against him but also to provide an opportunity to rebut the evidence or material.

(i) Cross-examination: Examination of a witness by the opposite party is called cross-examination. The main aim of cross-examination is the detection of falsehood in the testimony of the witness. The rules of natural justice say that evidence may not be read against a party unless the same has been subjected to cross-examination or at least an opportunity has been given for cross examination.

(ii) Legal Representation: Ordinarily the representation through a lawyer in the administrative adjudication is not considered as an indispensable part of the fair hearing. However, in certain situations denial of the right to legal representation amounts to violation of natural justice. Thus, where the case involves a question of law or matter which is complicated and technical or where the person is illiterate or expert evidence is on record or the prosecution is conducted by legally trained persons, the denial of legal representation will amount to violation of natural justice. In such conditions the party may not be able to meet the case effectively and therefore he must be given the opportunity to engage professional assistance to make his right to be heard meaningful.

(d) Disclosure of evidence: A party must be given full opportunity to explain every material that is sought to be relied upon against him. Unless all the material (e.g. reports, statements, documents, evidence) on which the proceeding is based is disclosed to the party, he cannot defend himself properly.

(e) Reasoned Decision or Speaking Orders: Till recently, it was considered that the requirement to give reasons was not part of the principles of natural justice. In India there is no general statutory provision which requires the authority to give reasons. But, the Courts have entrusted the duty on the administrative authorities to give reasons. When a statute imposes the requirement of giving reasons it is considered to be mandatory.

Example 1: In Padfield v. Minister of Agriculture, the Minister gave reasons for refusing to refer the complaint to the Committee and gave detailed reasons for his refusal. It was admitted that the question of referring the complaint to a committee was within his discretion. When his order was challenged, it was argued that he was not bound to give reasons and if he had not done so, his decision could not have been questioned and his giving of reasons could not put him in a worse position. The House of Lords rejected this argument and held that the Ministers’ decision could have been questioned even if he had not given reasons. It is submitted that the above view is correct.

Example 2: In Sunil Batra v. Delhi administration, the Supreme Court while interpreting section 56 of the Prisons Act, 1894, observed that there is an implied duty on the jail superintendent to give reasons for putting bar fetters on a prisoner to avoid invalidity of that provision under Article 21 of the Constitution. Thus the Supreme Court laid the foundation of a sound administrative process requiring the adjudicatory authorities to substantiate their order with reasons.

4.7 Exceptions to rule of natural justice

The principles of natural justice have taken deep root in the judicial conscience of our people. They are now considered so fundamental as to be ‘implicit in the concept of ordered liberty and therefore, implicit in every decision making function, call it judicial, quasi-judicial or administrative.

Where authority functions under a statute and the statute provides for the observance of the principles of natural justice in a particular manner, natural justice will have to be observed in that manner and in no other. No wider right than that provided by statute can be claimed nor can the right be narrowed. Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The implication of natural justice being presumptive it may be excluded by express words of statute or by

necessary intendment. So the principles of natural justice can be modified and also in exceptional cases they can even be excluded. Some the exceptions are given below:

4.7.1 Statutory Exclusion

The principle of natural justice may be excluded by the statutory provision. Where the statute expressly provides for the observance of the principles of natural justice, the provision is treated as mandatory and the authority is bound by it. Where the statute is silent as to the observance of the principle of natural justice, such silence is taken to imply the observance thereto. However, the principles of natural justice are not incapable of exclusion. The statute may exclude them. When the statute expressly or by necessary implication excludes the application of the principles of natural justice the courts do not ignore the statutory mandate. But one thing may be noted that in India, Parliament is not supreme and therefore statutory exclusion is not final. The statute must stand the test of constitutional provision. Even if there is no provision under the statute for observance of the principle of natural justice, courts may read the requirement of natural justice for sustaining the law as constitutional.

Example 1: In Defense of India Act, 1962, Rule 29 & 30 empowers the executive to make orders for externment for the maintenance of public order. No hearing was necessary for the purpose of making such order to direct the removal, detention, externment, interment and the like of any person, if it is ‘satisfied’ that such order was necessary for the defense or efficient conduct of military operations and maintenance of Public order.

Example 2: In Union of India v. Cynamide India Ltd., SC held that no principles of Natural Justice had been violated when the Government issued a notification fixing the prices of certain drugs. The Court reasoned that since the notification showed from a legislative act and not an administrative one so principles of natural justice would not applied.

4.7.2 Emergency

In exceptional cases of urgency or emergency where prompt and preventive action is required the principles of natural justice need not be observed.

Emergency or prompt action in case of public interest, public safety or public health was held to be a reasonable, valid and justifiable ground for exclusion of Principles of Natural Justice. Thus, the pre-decisional hearing may be excluded where the prompt action is required to be taken in the interest of the public safety or public morality.

4.7.3 Interim disciplinary action

The rules of natural justice are not attracted in the case of interim disciplinary action.

Example 1: The order of suspension of an employee pending an inquiry against him is not final but interim order and the application of the rules of natural justice is not attracted in case of such order.

Example 2: Interim anti-social behaviour orders made without notice are not unlawful where it is necessary for the court to act urgently to protect the interests of a third party or to ensure that the order of the court is effective.

4.7.4 Academic evaluation

Where a student is removed from an educational institution on the grounds of unsatisfactory academic performance, the requirement of pre-decisional hearing is excluded. The Supreme Court has made it clear that if the competent academic authority assess the work of a student over the period of time and thereafter declare his work unsatisfactory the rule of natural justice may be excluded but this exclusion does not apply in the case of disciplinary matters.

In Karnataka Public Service Commission v. B.M. Vijay Shanker, when the commission cancelled the examination of the candidate because, in violation of rules, the candidate wrote his roll number on every page of the answer-sheet, the Supreme Court held that the principles of natural justice were not attracted, the Court observed that the rule of hearing be strictly construed in academic discipline and if this was ignored it would not only be against the public interest but also erode the social sense of fairness.

4.7.5 Impracticability

Where the authority deals with a large number of person it is not practicable to give all of them opportunity of being heard and therefore in such condition the court does not insist on the observance of the rules of natural justice.

In P. Radhakrishna v. Osmania University, where the entire MBA entrance examination was cancelled by the University because of mass copying, the Court held that notice and hearing to all candidates was not possible in such a situation, which had assumed national proportions, Thus the court sanctified the exclusion of the rules of natural justice on the ground of administrative impracticability.

5. Government Contract

• • A contract to which the Central Government or a State Government is a party is called a ‘Government Contract’.
  • The Indian Contract Act, 1872 does not prescribe any form for entering into contracts. A contract may be oral or in writing. It may be expressed or be implied from the circumstances of the case and the conduct of the parties. But the position is different in respect of Government Contracts. A contract entered into by or with the Central or State Government has to fulfil certain formalities as prescribed by Article 299 of the Indian Constitution.
  • It is true that in respect of Government Contracts the provisions of Article 299(1) must be complied with, but that does not mean that the provisions of the Indian Contract Act have been superceded.
  • In the case of State of Bihar v. Majeed, the Supreme Court has held that

“Like other contracts, a Government Contract is also governed by the Indian Contract Act, yet it is distinct a thing apart. In addition to the requirements of the Indian Contract Act such as offer, acceptance and consideration, a Government Contract has to be complied with the provisions of Article 299. Thus, subject to the formalities prescribed by Article 299 the contractual liability of the Central or State Government is the same as that of any individual under the ordinary law of contract.”

• • As regards the interpretation of contract, there is no distinction between the contracts to which one of the parties is the Government and between the two private parties.
  • Though there is hardly any distinction between a contract between private parties and Government contract so far as enforceability and interpretation are concerned yet some special privileges are accorded to the Government in the shape of special treatment under statutes of limitation.

5.1 Formation of Government Contracts

The executive power of the Union of India and the States to carry on any trade or business, acquire, hold and dispose property and make contracts is affirmed by Article 298 of the Constitution of India. If the formal requirements required by Article 299 are complied with, the contract can be enforced against the Union or the States.