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Sunday, August 29, 2010

Administrative Law - Judicial Control

            Judicial control mechanism of administrative discretion is exercised at two stages.
A.        Control at the stage of delegation of discretion.
B.        Control of the exercise of discretion.
A.        Control at the stage of delegation of discretion.
1)         Administrative discretion and art 14.
2)         Administrative discretion and art 19, 21, 22 etc.
B.        Control at the state of exercise of discretion.
1.         Abuse of discretion- when the authority has not exercised its discretion properly.
2.         Non application of mind- the authority is deemed not to have excised its discretion at all.
(1)        Abuse of discretion (Not properly exercised)
(i)         Unreasonable exercise of discretion.
(ii)        Mixed motives.
(iii)       Bad Faith.
(iv)       Subjective Satisfaction.
(v)        Relevant and Irrelevant consideration.
(vi)       Legitimate expectation.
(vii)      Proportionality.
2.         Non Application of Mind- (Failure to exercise )
(i)         Abdication and dictation of discretion.
(ii)        Fettering of discretion.
(iii)       Estoppel.
(iv)       Delegation of discretion.
(v)        Acting Mechanically.

(A)       Abuse of DISCRETION:
            An authority shall be deemed to have abused its jurisdiction when it exercises its power for an improper purpose or on extraneous consideration, or in bad faith, or leaves out a relevant consideration or does not exercise the power by itself but of the instance and discretion of someone else.
(1)        Mala Fides :
            Mala fide or bad faith means dishonest intention or corrupt motive. At times, the court uses the phrase 'mala fide' in the broad sense of any improper exercise or abuse of power. In this sense mala fide is equated with any ultra virus exercise of administrative power. However the term 'mala fide' here has not been used in the broad sense but in narrow sense of exercise of power with dishonest intent or corrupt motive.
            Mala fide in this narrow sense, would include those cases where the motive behind an administrative action is personal animosity itself or its relatives or friends. Mala fide exercise of discretionary power is bad as it amounts to abuse of power.
Pratap Singh v. Punjab AIR 1964 SC :
            The appellant a civil surgeon in the employment of the state govt. was placed under suspension and a disciplinary action was started against him on the charges of bribe. The appellant alleged that disciplinary action had been initiated at the instance of Chief Ministry to wreak personal vengeance on him. From the sequence of events, certain tape recordings and the absence of an affidavit denying allegations, the court concluded that charge of mala fide is proved. This case shows that even if govt. has legal power to take disciplinary action for misconduct against a civil servant, it could not so if the action was activated out of malice.
Rowjee v. State of Andhra Pradesh (AIR 1967 SC) :
            The court held that Chief Minister had acted mala fide in giving directions regarding the selection of particular transport route for nationalization, as he sought to take vengeance against the private operators on those routes, as they were his political opponent.
G. Sadananda v. State of Kerala (AIR 1966 SC):
            In this case, the petitioner, a kerosene dealer was detained under the Defense of India Rules, to prevent him from acting in a manner prejudicial to the maintenance of supplies and services essential to the life of community. The fact were brought before the court to show that the D.S.P. made a false report against the petitioner in order to benefit his relative in the same trade by eliminating the petitioner from the trade, by obtaining the distributorship for kerosene. The D.S.P. filed no affidavit to controvert allegations, and the affidavit filed on behalf of govt. by the Home Secretary was very defective. The SC declared the order of detention to be clearly and plainly mala fide.

The burden of providing mala fide is on individual making the allegation as the order is regular on its face and there is a presumption in favour of the administration that it exercises its power in good faith and for public benefit. The petitioner should produce sufficient material to convince the court of the mala fide of the govt. The burden of the individual is not easy to discharge as it requires going in to the motives or the state of mind of an authority, and it is hardly possible for an individual to know the same and it is all the more difficult to establish it before a court.
            The difficulties inherent in proving mala fides are brought by SC in E.P. Royappa v. State of Tamil Nadu AIR 1974 SC although majority felt that these were circumstances to create suspicious about the bonafides of the govt. nevertheless the court refused to declare the action malafide as suspicion could not take the place of proof and proof needed here is high degree of proof.
            Malafide may also be inferred from the authority ignoring apparent facts either deliberately or sheer avoidance. Because of the difficulty of proving malafides, only a few cases have occurred so far in which administrative orders may have been quashed on this ground.
2.         Irrelevant Consideration:
            A discretionary power must be exercised on relevant and not on irrelevant or extraneous considerations. It means that power must be exercised taking in to account the consideration mentioned in the statute. If the statute mentions no such considerations, the power is to be exercised on considerations relevant for the purpose for which it is conferred. If the authority concerned bags attention to or takes in to account wholly irrelevant or extraneous circumstance, events or matters then the administrative action is ultra-vires and will be quashed.
            Even when a statute does not fully spell out the relevant criterion or consideration and may appear to confer power in almost unlimited terms, the court may, by looking in to the purpose, tenor and provision of the act, assess whether extraneous or irrelevant consideration have been applied by the administrative in arriving at its decision.
Ram Manohar Lohia v. State of Bihar (AIR 1966 SC) :
            The petitioner was detained under the Defence of India Rules, 1962 to prevent him from acting in a manner prejudical to the maintenance of 'law and order' whereas the rules permitted detention to prevent subversion of 'public order'. The court struck down the order as in its opinion, the two concept were not the same, 'law and order' being wider then public order.
Barium Chemicals Ltd. v. Company Law Board AIR 1967 SC :
            In this case the Company Law Board exercising its powers under Sec. 273 of the Companies Act 1956 ordered on investigation in to the affairs of Barium Chemicals Ltd. However the basis of the exercise of discretion for ordering investigation was that due to faulty planning the co. incurrent a loss as a result of which the value of the shares had fallen and many eminent persons had resigned from the board of directors. The court quashed the order of the board on the ground that the basis of exercise of discretion is extraneous to the factors mentions in sec. 237 for such exercise of discretion.
D. Ramaswami v. State of Tamil Nadu (AIR 1982 SC) :
            The order of compulsory retirement of a government servant was struck down as it was passed fallowing close upon needs of his promotion to a higher post. The basis of retirement was one adverse entry in his confidential file several years prior to his promotion.
3.         Leaving out relevant consideration:
            If in exercising its discretionary power an administrative authority ignores relevant considerations, its action will be invalid. An authority must take in to account the consideration which a statute prescribes expressly and impliedly.
            It was difficult to establish that the authority had left out relevant considerations because of the absence of reasons. Therefore not much case law had occurred under this head with the courts insistence on the supply of reasons by administrative authorities at least to them and also their tendency to look in to the govt. record; this ground has become important one.
Rampur Distillery Co. v. Company Law Board (1969) 2 SCC
            The Company Law Board acting under Sec. 326 of Companies Act 1956, refused to give its approval for renewing the managing agency at the co. concerned on the ground of past grossly improper misconduct of the managing director of the managing agent in relation to various other companies of which he was director. The SC thought it did not find any fault in taking in to consideration the best conduct, held the order bad because the board did not take in to consideration that present acts which were very relevant factors in judging suitability.
Ashadevi v. K. Shivraj AIR 1979 SC :
            The petitioner was detained with a view to preventing him from engaging in transporting smuggled goods. The detaining authority based its decision on the detenu's confessional statement before the custom officers, but the fact having bearing on the question whether his confession was voluntary or not were not placed before authority. It was held that since the authority did not consider vital facts relevant to the detention of the petitioner the detention order was bad.
4.         Mixed Considerations:
            The attitude of judiciary on the question of exceed consideration does not depict a uniform approach of all types of cases. In preventive detention cases, the court have taken a strict view of the matter and has held such on order invalid if based on any irrelevant ground along with relevant grounds.
Shibban Lal v. State of U.P. (AIR 1954 SC):
            The petitioner was detained on two grounds, first that his activities were prejudicial to the maintenance of supplies of essentials to community and second that his activities were injurious to the maintenance of public order. Later govt. revoked his detention on the first ground as either it was unsubstantial or non existent but continued it on the second. The court quashed the original detention order.
5.         Unreasonable exercise of discretion:
            'Unreasonableness' may also mean that even though the authority has acted according to law in the sense that it has not acted on irrelevant grounds or exercised power for an improper purpose, yet it has given more weight to some factors then they deserved as compared with other factors.
            Unreasonableness may furnish a ground for intervention by the court when the constitution of India or statute so requires A. 14 of the constitution guarantees equality before law but the courts have permitted reasonable classification to the made.
            In Maneka Gandhi v. UOI AIR 1979 SC it was held that an order made under Passport Act, 1967 could be declared bad if it so drastic in nature, as to be imposing unreasonable restrictions on the individual freedom.
R.D. Shetty v. International Airport Authority (1979) 3 SC:
            The tenders for running a restaurant were invited by Airport Authority from 'registered second class hoteliers'. It was clearly stipulated that acceptance of tender would rest with the Airport Director who can reject or accept any tender without assigning any reason. The highest tender was accepted but the tenderer was not an hotelier at all. A writ petition was field by a person who was himself neither a tenderer nor an hotelier. His grievance was that he was in the same position as the successful tenderer because if an essential condition could be ignored the in the tender case why not in the petition.
            The SC accepted the plea of locus standi in challenging the administrative action J. Bhagwati held. :
(1)        Exercise of discretion is an inseparable part of sound administration.
(2)        It is well settled rule of act law that an executive authority must be rigorously held to the standard by which it professes its action to be judged.
(3)        It is indeed unthinkable that in a democracy government by the rule of the executive government or any of its officers should posses arbitrary powers over the interest of an individual. Every action of the govt. must be influenced with reasons and should be free from arbitrariness.
(4)        The govt. can not be permitted to say that it will give jobs or enter into contract only in favour of those having gray hair or belonging to a particular party. Exercise of discretion must not be arbitrary, fanciful and influenced by extraneous considerations. In matters of discretion the choice must be dictated by public interest and must not be unprincipled or unreasonable.
            Srilekha Vidyarthi V State of U.P. (AIR 1991 SC) (P-64 A. Jain)[H1] 

6.         Subjective Satisfaction
            The satisfaction of the executive must be based on right test and right construction of a statute and as materials which had probative value and were such as national human being would consider connected with the fact in respect of which the satisfaction was to be reached. The satisfaction ought to be based on relevant and non-extraneous consideration
            State of Rajasthan v. UOI. (AIR 1977 SC)
            The Supreme Court observed that although the court could not go into the correctness of the decision, if the satisfaction of the president was based on malafide or wholly extraneous or irrelevant ground, the court would have jurisdiction to examine it because in that case there would be no satisfaction of the president. Although the satisfaction of the president could not be challenged, the existence of the satisfaction could be challenged.
B)        On Application of Mind (Failure to exercise discretion)
            Where discretion has been conferred on an authority it is expected to exercise the same by applying its mind to the facts and circumstances of the case in hand, otherwise its action or decision will be bad and the authority is deemed to have boiled to exercise its discretion; the authority may not apply its mind to the vital facts, or may not comply with the condition precedent for the exercise of its power, or it may act mechanically or without due cure or it may abdicate its power to someone else, or it may out under the dictation of superior, or it ay impose fetters on the exercise of its discretionary powers. These categories are not exclusive but overlapping
1.         Abdication of functions
            An authority to whom discretion has been granted by a statute may leave it to be exercised by the subordinates without acting it self an order made by subordinate is not valid.
            Manikchand V. Sate AIR 1973 goa/Guj[H2] 
            The scheme of nationalization of certain bus route was published by the manager of the state road transport corporation without the corporation itself considering the scheme though the statute required that it was the corporation which was to consider the scheme.
2)         Acting under dictation
            A situation of the authority not exercising discretion crises when the authority does not consider the matter it self but exercise its discretion under the dictation of a superior authority. This in law would amount to non exercise of its power by authority and will be bad. Although the authority purports, to act itself yet, in effect it is not so as it does not take the action in question in its own judgment as is intended by the statute.
            Commissioner of Police v.  Gorhardas Bhanji (AIR 1952 SC)
            The Bombay police act 1902 granted authority to the commissioner of police to grant license far the construction of Cinema theatres. The commissioner granted license to the respondent on the recommendation of an advisory committee but later cancelled it at the direction of state govt. The court held that cancellation order bad as it had come from govt. and the commissioner merely acted as transmitting again.
            Purtabpore Co. Ltd. v. Canee Comm. of Bihar (AIR 1970 SC)
The Cane commissioner who had the power to reserve sugarcane areas for sugar factories, at the dictation of C.M. excluded 99 villages from the area reserved by him in favour of the appellant company. The  court quashed the exercise of discretion on ground that he abdicate his power by exercising it at the dictation of some other authority.
            There is, however a difference between seeking advice or assistance and being dictated. Advice or assistance may be taken so long as the authority concerned does not mechanically act on it, and itself take the final decision. Thus in the Gordhandas case the court held that granting of licence on the recommendation of advisory committee was not bad as the will of the authority cannot be said to be overborne by it.

3)         Imposing fetters on the exercise of discretion  
            When a statute confers power on an authority to apply a standard (as is the case in administrative discretion) it is expected of it to apply it from case to case, not to fetter its discretion by declaration of rules or policy to be followed by it uniformly in all cases. What is expected of the authority is that it should consider each case on its merit and then decide it. If instead, it lays down a general rule to be applicable to each and every case, then it is preventing itself from exercising its mind according to the circumstances of each case and this amount to going against what statute had intended the authority to do.
Gell v. Teja Noora (1903) LR Bom
The Commissioner of police had discretion to refuse to grant a licence for any land conveyance which he might consisting to be insufficiently sound or otherwise comfit far conveyance of the public.  Instead of applying his discretion to grant licence or not, he issued a general order setting details of construction which are required to be adopted for licence. The court held the order illegal.
The position is well established that the exercise of statutory discretion cannot be followed by adopting rigid policy or a mechanical rule. A case somewhat going against this proposition to.
Shri Ram Sugar industries v. State of A.P. AIR 1974 SC
A tax was levied on the purchase of sugarcane by sugar factories but the govt. was given power to exempt from payment of tax any new sugar factory. However the govt. made it a policy to grant exception only to factories in the co-operative sectors. and on the basis of this polity denied exception to the appellant. Court upheld the action of the govt. The majority justified its view on the ground that it was open to the govt. to adopt a policy to make a grant only to a certain classes and not to some other class.
Justice Mathew delivering the dissenting opinion. The minority emphasized that an authority entrusted with a discretion must not by adopting a rule of policy disable itself from exercising it s discretion in individual case.
4.         Delegation of Discretion
            Delegation means transfer or transmission of discretion from a superior authority to a subordinate. It may take place when the law either expressly or impliedly provide for such possibility.
            Ganpati Singh v. State of Ajmer (AIR 1955 SC)
            The Power to issue certain rule was conferred on the commissioner but he delegated the power to district magistrate the could held that Chief Commissioner action in delegating his power was ultravires.
5.         Acting Mechanically
            An authority can not be said to exercise statuary discretion when it passes an order mechanically and without applying its mines to the facts and circumstances of the case. This may happen either because the authority has taken one view of tis power or because of inertia or laziness or because of the its reliance on the subordinates. 
            Nand Lal v. Bar Council of Gujarat (AIR 1981 SC)
            It was held that in forwarding a case to the disciplinary committee the council can not act mechanically it must apply its mind to find out whether these is any reason to believe that any advocate has been guilty of misconduct.
            Jaswant Singh v. State of Punjab (AIR 1958 SC)
            Under prevention of corruption act, 1947 the sanction of govt. is necessary for prosecuting a public servant of certain offences. It has been held that the sanction under the act is not intended to be an automatic formality. The facts consisting the offence charged should be placed before the sanctioning authority which should decide the matter after applying its mind to them.

            G. Sadanand v. State of Kerala (AIR 1966 SC)
            Supreme Court commented adversely on the casual manner in which the deciding authority had acted in passing the order. The order was quashed with a short reminder to the administration that it should be more careful in exercising its powers. The court pointed out that casual use of unfettered power by them may ultimately pose a serious threat to basic values of the democratic way of life.

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