'Reason Is The Soul Of Justice': Patna High Court Imposes Exemplary Cost On Govt Official For Passing Unreasoned Order

The Patna High Court has recently held that even administrative and quasi-judicial authorities are expected to pass reasoned orders, in support of their conclusions, to avoid any prejudice. 

Justice Chakradhari Sharan Singh, while hearing an appeal against a black-listing (unreasoned) order passed by the Chief Engineer of State's Road Construction Department, observed,

"Keeping in mind the gravity of the consequences of action of black-listing, the authority exercising such power cannot afford to adopt a casual approach. Graver is the adverse effect of an action of a quasi judicial functionary, heavier is the obligation on the authorities exercising such power to act fairly, reasonably, in a transparent manner and in conformity with the principles of natural justice."

The Judge added,

"This duty becomes very onerous in the background of grave fall out of action of black-listing on a contractor. Recording of reasons is one of the basic, but most essential requirement for a qausi judicial functionary, if its order has adverse civil/evil consequences. In the absence of this minimum basic requisite, an order of black-listing would become vulnerable."

Justice Singh heavily relied on the Supreme Court's observations in Kranti Associates (P) Ltd. v. Masood Ahmed Khan, where the the requirement of disclosing the reasons by a quasi judicial authority in support of its order has been exhaustively dealt with.

The Top Court had observed that recording of reasons: (i) operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power; and (ii) reassures the decision-maker has exercised that discretion on relevant grounds and by disregarding extraneous considerations.

It had clarified that insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. It was held:

"Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial, and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior courts."

Accordingly, the High Court imposed a cost of Rs. 50,000/- upon the Chief Engineer in this case, payable to the petitioner within one month, for passing an unreasoned order and completely ignoring all the observations made by the Supreme Court.

The matter in-brief

The Chief Engineer had black-listed the petitioner for 15 years. The said order was challenged by filing a writ petition on various grounds, including the ground that the show cause notice issued to the petitioner before issuance of the order of black-listing did not indicate the proposed final action in the event the explanation in response to the show-cause notice was not found satisfactory. The said plea was disposed.

Subsequently, the petitioner preferred a Letters Patent Appeal, which was disposed of by a Division Bench, directing the grievance to be listed before the relevant authority.

Accordingly, the Additional Chief Secretary of the State Road Construction Department was moved, who rejected the petitioner's appeal.

Therefore, the petitioner challenged the said order of the Additional Chief Secretary rejecting his appeal. The petitioner has also sought to set aside the order whereby it was black-listed.

Advocate Ranjeet Kumar, appearing on behalf of the petitioner, submitted that: (i) the impugned order has been passed in utter violation of this Court's previous order directing to take a holistic view of the matter on various aspects, including the aspect of the period of black-listing; (ii) the impugned order does not even refer to the order passed by this Court, and the same cannot be said to be reasoned, and (c) the black-listing order is unsustainable as it does not disclose any reason as to why the petitioner's explanation submitted in response to the show-cause notice was not acceptable.

Findings

The Court held that the black-listing order was passed without referring to the petitioner's explanation and thus is manifest without the application of mind and thus unsustainable. Further, it also set aside the impugned order by the appellate authority by remarking that,

"Worse is the case with the order passed by the appellate order, which is not only unreasoned, it has ignored the observations made by this Court in the earlier proceeding."

It rejected the State's plea of res judicata, stating,

"This Court, in the earlier writ petition, had found no infirmity in the show cause notice and had turned down the plea that the show cause notice did not indicate the proposed action of black-listing under the Rules of 2007. It is evident on plain reading of the said order that in respect of other grounds, the Court did specifically mention that the said aspect required a 're-look'."

It added,

"It is unreasonable for the State to contend that after rejection of the petitioner's appeal, it is impermissible for the petitioner to challenge the original order. It is illogical to raise such objection. Once the petitioner has challenged the order of the appellate authority, it is always open for him to question the original order, if the grounds for such challenge are available to him. It would be totally a meaningless exercise for the petitioner to challenge the appellate order if he is not permitted to challenge the original order."

Finally, the Court said,

"The Court is constrained to impose exemplary cost in the facts and circumstances noted above as, in the Court's opinion, the authorities have passed the impugned orders completely ignoring all the observations made by the Supreme Court..."

It however refrained from initiating suo motu contempt proceeding against the Appellate Authority and issued a note of caution to the authorities to "be careful while dealing with the judicial orders passed by this Court, defiance of which may have serious consequences."

Lastly, the Court said,

"Since the impugned order of black-listing has been quashed by the present order on the ground of the same being unreasoned and non-speaking, the competent authority shall be at liberty to pass an order afresh, duly taking into account the explanation submitted by the petitioner..."

Case Title: Star Build Max Pvt. Limited v. The State of Bihar & Ors.

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