Administrative Action Of Public Authority Cannot Be Invalidated Merely For Not Recording Reasons When It Had No Duty To Do So: Supreme Court

The Supreme Court observed that an administrative action of a public authority cannot be struck down merely for not 'recording' reasons when there was no duty on its part to do so.

The court may, when there is no duty to record reasons, support an administrative decision, with reference to the pleadings aided by materials, the bench of Justices KM Joseph and S. Ravindra Bhat observed. The bench said that, reasons may, in certain situations, have to be recorded in the order. But in other contexts, it would suffice that the reasons are to be found in the files.

The court also clarified that 'even if there is no duty to record reasons or support an order with reasons, there must be a reason'. 

In its judgment setting aside the Patna High Court judgment which directed the National Highway Authority of India to shift the toll plaza on Patna-Bakhtiyarpur four-lane road (NH-30) from Karmalichak near Deedarganj, the court elaborately examined [Para 40- ] the 'duty of administrative authorities to give reasons'.

Referring to various authorities (Indian and foreign), Justice KM Joseph, who authored the judgment, observed that there is no general duty, when an administrative decision is taken, to give reasons. A Statute may, however, explicitly provide that the Executive Authority must provide reasons and it must be recorded in writing.

Spectrum of Administrative Decisions

The court then noted that administrative decisions are made in a wide spectrum of situations and contexts. In this regard, the court said:

"Undoubtedly, in India, every state action must be fair, failing which, it will fall foul of the mandate of Article 14. It is, at this juncture, we may also notice that the duty to give reasons, would arise even in the case of administrative action, where legal rights are at stake and the administrative action adversely affects legal rights. There may be something in the nature or the context, under which, the administrative action is taken, which may necessitate the authority being forthcoming with rational reasons. There are other decisions, which essentially belong more to the realm of executive policy-making, which ordinarily may not require the furnishing of reasons." (Para 60)

Advantages of introducing a reasons driven regime

The court then listed the advantages of introducing a reasons driven regime (Para 61):

Persons, who may have a right or an interest, would know, what are the reasons which impelled the Administrator to take a particular decision.

Judicial review, in India, which encompasses the wide contours of public interest litigation as well, would receive immeasurable assistance, if the reasons for particular decisions, are articulated to the extent possible.

The giving of reasons also has a disciplining effect on the Administrator. This is for the reason that the reasons would capture the thought process, which culminated in the decision and it would help the Administrator steer clear of the vices of illegality, irrationality and also disproportionality.

Reasons could help establish application of mind. Conversely, the absence of reasons may unerringly point to non-application of mind.
The duty to act fairly, may require reasons to be recorded but the said duty, though there is a general duty on all state players to act fairly, may have its underpinnings, ultimately in legal rights.

For every decision, there would be and there must be, a reason

The court said that though there should be reasons which persuaded the Administrator to take a particular decision, but that does not mean that the reasons must always be incorporated in a decision.

It is one thing to say that there should be reasons, which persuaded the Administrator to take a particular decision and a different thing to find that the reasons must be incorporated in a decision. The question, relating to duty to communicate such a decision, would arise to be considered in different situations, having regard to the impact, which it, in law, produces. In fact, the second proviso to Rule 17 of the Rules, provides not only for there being reasons, but the reasons for refusal to permit barricades, must be communicated. If the law provides for a duty to record reasons in writing, undoubtedly, it must be followed and it would amount to the violation of the Statute, if it were not followed. Even if, there is no duty to record reasons or support an order with reasons, there cannot be any doubt that, for every  decision, there would be and there must be, a reason. (Para 62)

Thus, the court said that in the the absence of the duty to record reasons, administrative action cannot be invalidated merely because no reasons are to be found recorded.

The Constitution does not contemplate any Public Authority, exercising power with caprice or without any rationale. But here again, in the absence of the duty to record reasons, the court is not to be clothed with power to strike down administrative action for the mere reason that no reasons are to be found recorded. (Para 62)

Reasons for a particular decision, may be gleaned from pleadings/file noting etc.

The court noted that reasons for a particular decision can be gathered from pleadings, file noting etc. It said:

In certain situations, the reason for a particular decision, may be gleaned from the pleadings of the Authority, when the matter is tested in a court. From the materials, including the file noting's, which are made available, the court may conclude that there were reasons and the action was not illegal or arbitrary. From admitted facts, the court may conclude that there was sufficient justification, and the mere absence of reasons, would not be sufficient to invalidate the action of the Public Authority. Thus, reasons may, in certain situations, have to be recorded in the order. In other contexts, it would suffice that the reasons are to be found in the files. The court may, when there is no duty to record reasons, support an administrative  decision, with reference to the pleadings aided by materials. (Para 62)

Rule 8 Second Proviso

The issue in this case was whether the authority which invoked power under second proviso to Rule 8 of National Highways Fee (Determination of Rates and Collection) Rules, 2008, was required to record reasons.

 Rule 8(1) provides that the Executing Authority or the Concessionaire shall establish toll plaza beyond a distance of 10 kilometres from a municipal or local town area limits. First Proviso states that the executing authority may, for reasons to be recorded in writing, locate or allow the concessionaire to locate a [fee plaza] within a distance of ten kilometres of such municipal or local town area limits, but in no case within five kilometres of such municipal or local town area limits:

Second Proviso reads as follows: Where a section of the national highway, permanent bridge, by-pass or tunnel, as the case may be, is constructed within the municipal or town area limits or within five kilometres from such limits, primarily for use of the residents of such municipal or town area, the [fee plaza] may be established within the municipal or town area limits or within a distance of five kilometres from such limits.

The court noticed that, unlike the first proviso, the second proviso does not contemplate that the reasons for exercising the discretionary power, is to be recorded in writing. It noted that High Court has read the second proviso in continuation with the first proviso and thereby concluding that, even the requirement of the first proviso, viz., the recording of reasons in writing, would also become necessary to invoke the power under second proviso.

"We would think that such an interpretation would fly in the face of the clear words used in the second proviso, and would, what is more, amount to rewriting the Rule. The real safeguard, which is present in the second proviso, is the nature of the objective and inflexible requirements, which are declared therein.", the court said.

However, the bench also explained the duty of the Executing Authority while invoking Second proviso powers as follows:

"However, a decision must be taken. It must be taken by the Competent Authority. The Authority, we have found is the Executing Authority. It must apply its mind and be convinced that a section of the national highway, inter alia, is constructed within the municipal or town area limits. This is a pure question of fact. Secondly, it must conclude that the said construction is 'primarily' or 'mainly' for the 'use' of the residents of the municipal limits. This is again a factual matter. We may also find that the second proviso does not compel the Authority to locate the plaza within the municipal or town area limits. It is a matter of discretion to be exercised, no doubt, taking into consideration the maximization of toll collection also and avoiding of leakage of toll, bearing in mind the fact that the Concessionaire is permitted to collect the toll only for the period of the Concessionaire Agreement under Rule 16. To show application of mind, there must be material. Even in the absence of reasons, recorded as such, there must be proper pleadings with materials, unless facts are not in dispute." (Para 77)

Also from the judgment

'In India, Every State Action Must Be Fair, Failing Which It Will Fall Foul Of Article 14' : Supreme Court Sets Aside Direction To Shift NH Toll Plaza

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