LLB 3 years Sem 3 Administrative Law April 2024 - 60/40 Question Paper with Solutions

A reasoned decision, also called a speaking order, is an order which records the reasons on which it is based, so that it "speaks for itself".

The duty to give reasons is now treated as the third principle of natural justice, alongside the rule against bias and the right to be heard.

Mediation is a method of alternative dispute resolution in which a neutral third person, the mediator, assists the parties to negotiate and to arrive at their own settlement. The mediator has no power to decide and imposes nothing; he facilitates communication, identifies interests and helps to generate options.

Droit administratif is the French system of administrative law: a body of rules developed by the administrative courts rather than by the legislature, governing the relations between the citizen and the administration and the liability of the State and its officials, and applied by a separate hierarchy of courts headed by the Conseil d'Etat.

A public corporation is a body corporate created by a special statute, or registered under the Companies Act with a controlling Government shareholding, to carry on a commercial, industrial, developmental or regulatory undertaking on behalf of the State, having a separate legal personality, its own funds and freedom from ordinary departmental procedure.

Justice Douglas described it as a device combining "the public ownership, public accountability and devotion to public purpose of a governmental agency, with the flexibility and initiative of a private enterprise".

Conciliation is a method of alternative dispute resolution in which a neutral third person, the conciliator, assists the parties to reach an amicable settlement and, unlike a mediator in the strict sense, may himself formulate and propose terms of settlement. The parties remain free to accept or reject them.

1. The doctrine. Montesquieu, L'Esprit des Lois (1748): the legislative, executive and judicial powers should be vested in three separate organs; no organ should exercise the functions of another; and no person should be a member of more than one organ. Its object is liberty, since concentrated power is abused.

2. Comparative position. The United States applies it strictly by constitutional text, tempered by checks and balances. England has never applied it. India occupies a middle position: functional differentiation without insulation.

3. What reflects the doctrine in India. Article 50 (separation of the judiciary from the executive, a Directive Principle); Articles 53 and 154 (executive power vested in the President and the Governors); Articles 121 and 211 (no discussion of a Judge's conduct in the legislatures); Articles 122 and 212 (courts may not inquire into legislative procedure); Article 361 (immunity of the President and Governors); and the independence of the judiciary under Articles 124 to 147 and 214 to 231.

This is a narrow and precise question, and it is not the same as "explain natural justice". The examiner wants the consequences of a breach.

1. The order is VOID, not merely voidable. The settled Indian position is that an order made in breach of natural justice is a nullity. Ridge v. Baldwin (1964) held the dismissal "void", and the House of Lords in Anisminic v. Foreign Compensation Commission (1969) treated a breach of natural justice as taking the decision outside jurisdiction. In India Nawabkhan Abbaskhan v. State of Gujarat (1974) held that an order passed in violation of natural justice is void, so that a person could not be convicted for its breach; and A.R. Antulay v. R.S. Nayak (1988) treated a direction given without hearing as a nullity liable to be recalled.

2. Consequences that follow from nullity.

1. it may be challenged collaterally, and not only in a direct proceeding;
2. it confers no rights and imposes no obligations, so disobedience of it is not an offence;

5. The consequences for the affected person. In a service case the order of dismissal falls, and the employee is entitled to be treated as continuing in service, with the department free to hold a proper inquiry; the question of back wages is separate and discretionary, and is often moulded (Managing Director, ECIL v. B. Karunakar, 1993, on the effect of non-supply of the inquiry report, where the Court held the order does not automatically fall but the employee must be given the report and an opportunity, and relief is moulded according to prejudice).

6. The "no prejudice" or useless formality argument. An authority sometimes argues that the breach made no difference because the outcome was inevitable. The courts treat this narrowly. S.L. Kapoor v. Jagmohan (1980): non-observance of natural justice is itself prejudice, and no one can say what the result would have been had it been observed; "the concept of prejudice must not be stretched". In John v. Rees (1970) Megarry J. observed that the path of the law is strewn with examples of open and shut cases which somehow were not, and of unanswerable charges which in the event were completely answered. But where the facts are admitted or the conclusion is inescapable in law, relief may be refused, as in Managing Director, ECIL v. B. Karunakar (1993) and Aligarh Muslim University v. Mansoor Ali Khan (2000).

1. What each is. A court is a permanent organ of the State, part of the ordinary judicial hierarchy, which exercises the judicial power of the State and decides disputes according to law. A tribunal is a body created by a specific statute to decide disputes in a particular field, judicial in substance but outside the ordinary hierarchy.

2. The differences.

4. The tests. Bharat Bank Ltd. v. Employees of Bharat Bank (1950) and Durga Shankar Mehta v. Raghuraj Singh (1954): the power to decide a lis judicially, with a duty to act judicially, marks a "tribunal" for Article 136. Associated Cement Companies v. P.N. Sharma (1965): the essential test is whether the State has clothed the body with part of its own inherent judicial power. A purely advisory body, or one that decides on policy without a lis, is neither court nor tribunal.

5. Why the distinction matters. It decides whether Article 136 special leave lies; whether certiorari and prohibition lie; whether Article 227 applies; whether the Evidence Act binds; and whether the decisions can be cited as precedent.

6. The constitutional position of tribunals. L. Chandra Kumar v. Union of India (1997): judicial review under Articles 226, 227 and 32 is part of the basic structure; the exclusion clauses in Articles 323A(2)(d) and 323B(3)(d) are unconstitutional; tribunals are courts of first instance whose decisions are subject to review by a Division Bench of the High Court. A tribunal can therefore never displace a court, however court-like it becomes.

3. Composition. A chairperson and not more than eight members, of whom not less than half must be judicial members, and not less than half must be from among the Scheduled Castes, Scheduled Tribes, Other Backward Classes, minorities and women. The chairperson is a former Chief Justice of India, a former Judge of the Supreme Court, or an eminent person of integrity and outstanding ability with at least twenty-five years' experience in anti-corruption policy, public administration, vigilance, finance, law or management. The term is five years or until the age of seventy.

4. Selection. By the President on the recommendation of a Selection Committee consisting of the Prime Minister (chairperson), the Speaker of the Lok Sabha, the Leader of the Opposition in the Lok Sabha, the Chief Justice of India or a Judge nominated by him, and an eminent jurist nominated by the President on the recommendation of the other four. A Search Committee assists it.

5. Jurisdiction, Section 14. It extends to:

1. the Prime Minister, but not in respect of allegations relating to international relations, external and internal security, public order, atomic energy and space; and an inquiry against the Prime Minister requires the approval of a full Bench of not less than two-thirds of the members, in a sitting held in camera;

3. the powers of a civil court under the Code of Civil Procedure for summoning, discovery, evidence on affidavit and requisitioning records (Section 27);
4. power to order preliminary inquiry and investigation (Section 20), after giving the public servant an opportunity of being heard, and to grant sanction for prosecution (Section 23);
5. power to order provisional attachment and, through the Special Court, confiscation of property derived from corruption (Sections 29 and 30);
6. power to recommend transfer or suspension of a public servant during an inquiry (Section 32), and to give directions to prevent the destruction of records (Section 33);
7. financial autonomy: its expenses are charged on the Consolidated Fund of India (Section 18).

7. Limitations. It cannot itself punish; it inquires, investigates and prosecutes before a Special Court under Section 35. A complaint must be within seven years of the offence (Section 53). A false or frivolous complaint is punishable under Section 46. The appointment of the first Lokpal took five years after the Act, and the Inquiry and Prosecution Wings were slow to be constituted, which is the standing criticism of the institution.

(a) Whether the case filed by the workers is maintainable? On what ground?

Yes. The workers have a right to be heard in the winding up of the company, and their petition is maintainable.

1. The authority. National Textile Workers' Union v. P.R. Ramakrishnan, (1983) 1 SCC 228. The Supreme Court held, by a majority, that workers of a company have a right to appear and be heard in a winding-up petition, both at the stage of admission and at the hearing, although the Companies Act named only the company, its creditors and its contributories.

4. The forum. A winding-up petition lies to the National Company Law Tribunal under the Companies Act, 2013, and insolvency proceedings lie to the NCLT under the Insolvency and Bankruptcy Code, 2016, in which the workmen's dues have a first-ranking claim under Section 53 alongside secured creditors. Where the promoter proceeds by a voluntary winding up, the workmen's remedy is under the labour statutes.
5. The parallel labour statutes. Even apart from company law, closure is regulated. Under Section 25FFA of the Industrial Disputes Act, 1947 an employer intending to close an undertaking must give sixty days' notice to the appropriate Government stating the reasons; under Section 25FFF workmen are entitled to notice and compensation as on retrenchment; and in an establishment covered by Chapter VB the prior permission of the appropriate Government is required under Section 25-O, a provision whose earlier form was struck down for want of a hearing and reasons in Excel Wear v. Union of India (1978), and which was re-enacted with those safeguards.

(b) As per which principle of law the promoter is required to hear the workers before winding up the company? Explain.

The principle is audi alteram partem, the second rule of natural justice: no person shall be condemned unheard.

4. The extent of the right. It is a right to be heard, not a right to veto. The court or tribunal, having heard the workers, may still order winding up if the statutory grounds are made out. The right ensures that the decision is taken on full material, not that it is taken in the workers' favour.
5. The limits. The rule may be excluded by express statutory words or by necessary implication; it yields in a genuine emergency, subject to a post-decisional hearing; and it does not apply to a purely commercial decision that affects no legal right, though the closure of an undertaking is not of that kind.

2. it must be executed on behalf of the President or the Governor; and
3. it must be executed by such person and in such manner as the President or the Governor may direct or authorise.

Two further points complete the answer. Article 298 is the source of the power to contract at all, giving the Union and the States the executive power to carry on trade and to make contracts. Article 299(2) provides that neither the President nor the Governor, nor the person executing the contract, shall be personally liable on it.

The general law adds that the contract must satisfy Section 10 of the Indian Contract Act, 1872, and the award of it is subject to Article 14, so it must not be arbitrary: Ramana Dayaram Shetty v. International Airport Authority of India (1979).

Why the conditions are mandatory. The object is to protect the public exchequer from being bound by the casual or unauthorised promises of individual officers. A contract not made in the prescribed form is void, unenforceable against the Government, and incapable of ratification, because there is nothing in existence to ratify: Mulamchand v. State of Madhya Pradesh (1968); Bihar Eastern Gangetic Fishermen Co-operative Society v. Sipahi Singh (1977).

3. The holding in B.K. Mondal. The contractor constructed a kitchen and storage shed at the request of an officer of the State; the contract did not comply with the constitutional formality; the State took possession and used the structures and then refused to pay. The Supreme Court held that Section 70 applies to the Government as it applies to a private person, that the claim under Section 70 is not founded on contract but is a claim in restitution to prevent unjust enrichment, and that the constitutional provision, being intended to protect the Government against unauthorised contracts, cannot be used to enable it to retain a benefit without paying for it.
4. What is recoverable. Compensation for the value of the benefit actually enjoyed, and not the contract price and not lost profits. The measure is restitutionary, not expectation-based.

The director made a rule that discretion would be used only if deficiency in age was less than two years.

(a) Whether director has any power to amend the rule made by parent Act? Explain.

No. The Director has no power to amend the parent law, and what he has done, though he calls it a rule, is in substance an amendment of the discretion the parent Act gave him. It is bad on two independent grounds.

3. This is the recognised head of "self-imposed fetter" or "acting on a rigid rule", one of the forms of failure to exercise discretion. The rule is not that an authority may never adopt a policy; it may, and consistency is a virtue. The rule is that it must not shut its ears to an applicant with something new to say, and must be prepared to make an exception in a deserving case. The classic statement is R. v. Port of London Authority, ex parte Kynoch (1919), and it was applied in British Oxygen Co. v. Board of Trade (1971), where Lord Reid said the authority may have a policy provided it "is always willing to listen to anyone with something new to say".
4. It is also substantive ultra vires. A rule that narrows a statutory benefit conferred by the parent Act is inconsistent with the Act and void: State of Karnataka v. H. Ganesh Kamath (1983); General Officer Commanding-in-Chief v. Dr. Subhash Chandra Yadav (1988).
5. Conclusion. The Director may issue guidelines indicating the kind of case he would normally regard as deserving. He may not issue a rule that excludes a class of case from consideration altogether. His rule is liable to be struck down, and an applicant refused under it is entitled to have his case considered on its merits.

7. The consequence. The order is a nullity, because the authority has not done the thing the statute required, namely to apply its own mind to the case. It is not a case of the authority deciding wrongly; it is a case of the authority not deciding at all.
8. The remedy. Certiorari to quash the order, and mandamus to compel the authority to consider and decide according to law. The court will not direct a particular outcome, because the discretion belongs to the authority, though under Article 226 the High Court may mould relief and in a clear case direct a specific result to prevent injustice: Comptroller and Auditor General v. K.S. Jagannathan (1986).
9. The practical result for the applicant. He does not obtain the certificate by the order of the court. He obtains the right to have his application considered on its merits by the Director, who must then decide whether his is a deserving case within the meaning of the parent Act.

2. But the power must be exercised fairly. The cancellation destroys the result of a whole year and affects the student's career. It is a decision affecting a legally protected interest, and the rule of audi alteram partem applies.
3. The authority is directly in point. Board of High School and Intermediate Education, U.P. v. Kumari Chittra Srivastava, (1970) 1 SCC 121. The candidate appeared at the Intermediate examination and passed. The Board, instead of declaring her result, made enquiries about her attendance, the regulations requiring attendance at 75 per cent of the lectures, and then withheld the result without hearing her. The Supreme Court held that she was entitled to an opportunity to represent her case before the adverse order was passed, and the order was quashed, leaving the Board free to reconsider after giving her a hearing.
4. Why a hearing matters even on an arithmetical question. The student may be able to show that the register is wrong, that absence was on medical grounds, that condonation was applied for and granted, or that she was permitted to appear on a representation whose truth the University itself accepted. None of that can be known unless she is asked.
5. The additional grounds available to the student.

(b) Which principle of law permits or prevents the university from cancelling the examination?

Two principles are in play, and they point in opposite directions.

What permits cancellation:

1. The doctrine of ultra vires applied to the student's own position: an admission or a candidature that does not satisfy a mandatory statutory condition is a nullity, and no estoppel can validate what the statute forbids. There is no estoppel against a statute: Excise Commissioner, U.P. v. Ram Kumar (1976). If the attendance requirement is mandatory and incapable of condonation, the University cannot confer eligibility by mistake or by conduct.
2. The statutory duty of the University to maintain academic standards, which the courts are reluctant to interfere with.

What prevents it on these facts:

1. Audi alteram partem, requiring notice and a hearing before the cancellation: Chittra Srivastava (1970).

3. Sir William Wade: "the law relating to the control of governmental power", the shortest and the best working definition.
4. Austin treated it as determining the ends and modes to which the sovereign power shall be applied; the Indian Law Institute adds the procedure for obtaining relief and the legislative control of the administration.

2. Nature. Administrative law is:

1. public law, governing the relation of the individual to the State;
2. judge-made and largely uncodified in India, since natural justice, ultra vires and abuse of discretion are the creation of decided cases and no general statute exists;
3. functional, studying what agencies do rather than how they are classified, which is why the judicial and administrative labels have lost their force since A.K. Kraipak (1970);
4. dynamic and expanding, growing with each new function the State assumes; and
5. organised around a single idea: power and its control.

7. the liability of the State in tort under Article 300 and in contract under Article 299, with promissory estoppel and legitimate expectation;
8. the civil services under Articles 308 to 323, the doctrine of pleasure and Article 311;
9. public undertakings, their control, and the reach of Article 12; and
10. institutional controls: Lokpal and Lokayuktas, the Central Vigilance Commission, the Comptroller and Auditor General, and the Right to Information Act, 2005.

5. Administrative law and constitutional law.

6. Sources. The Constitution; statutes; delegated legislation; judicial decisions, which supply nearly all the governing principles; and administrative directions and departmental practice.

2. Why judicial control is the effective control. Parliamentary control is weak: thousands of instruments are laid each year, the laying requirement is usually directory (Atlas Cycle Industries Ltd. v. State of Haryana, 1979), and the Committee on Subordinate Legislation can only report. Procedural control operates only where the parent Act provides for it. Judicial control operates always, on the application of the person affected, and through the doctrine of ultra vires it has two branches.

3. Substantive ultra vires: the rule is beyond the power.

1. The parent Act is unconstitutional. If the Act itself is void for want of legislative competence, or for breach of a fundamental right under Article 13, everything made under it falls with it.

4. The rule violates the Constitution. Delegated legislation is "law" within Article 13(3)(a), so it may be struck down for breach of any fundamental right. Air India v. Nergesh Meerza (1981): a service regulation terminating an air hostess on first pregnancy was struck down under Article 14 as "most unreasonable and arbitrary", and a power to extend the retiring age "at the option of the Managing Director" was struck down as an unguided discretion. Narendra Kumar v. Union of India (1960) under Article 19.
5. The rule is manifestly unreasonable or arbitrary. Kruse v. Johnson (1898) for bye-laws. In India arbitrariness is itself a breach of Article 14, so the ground is constitutional; Indian Express Newspapers v. Union of India (1985) collects the grounds on which subordinate legislation may be questioned and holds that it does not enjoy the same immunity as a statute, though the court is not the judge of policy.
6. Mala fides, though the courts are slow to infer bad faith in rule-making and the burden is heavy.
7. Unauthorised sub-delegation. Delegatus non potest delegare: Agricultural Market Committee v. Shalimar Chemical Works (1997), where a power given to the Government was purportedly left to a market committee.

3. Publication in the Official Gazette, generally mandatory. Harla v. State of Rajasthan (1951): a resolution of the Council of Ministers of the former Jaipur State had never been published, and the Supreme Court held it could not be enforced, since natural justice requires that a law be made known before a person is convicted under it. State of Maharashtra v. Mayer Hans George (1965) on the sufficiency of publication.
4. Laying before the legislature, which Atlas Cycle holds directory unless the Act makes it a condition of validity.

5. The presumption of validity. Subordinate legislation is presumed valid; the burden lies on the challenger; and the court will not strike a rule down merely because it thinks it unwise, inexpedient or capable of improvement.

6. Effect of being held ultra vires. The rule is void and is treated as never having been made. Severance is possible: the bad part may be struck down and the remainder allowed to stand if it can operate independently. Acts already done under the rule may in some circumstances be protected.

2. It supplies the procedure no Indian statute provides. India has no general Administrative Procedure Act. Natural justice supplies, case by case, what the legislature did not write, and the courts read it into every statute that does not exclude it: Cooper v. Wandsworth Board of Works (1863).
3. It makes judicial review possible. A reasoned order made on disclosed material can be tested; an unreasoned one made on undisclosed material cannot. Without the duty to give reasons, review would be a formality.
4. It confers legitimacy. A person who has been heard accepts an adverse decision as he never accepts one taken behind his back. That is why the rule matters even where the outcome would have been the same, and why S.L. Kapoor v. Jagmohan (1980) held that non-observance is itself prejudice.
5. It restrains the abuse of power, by forcing the decision into the open and requiring the decision-maker to confront the case against his own view.
6. It is a constitutional guarantee in India. After Maneka Gandhi v. Union of India (1978), a procedure that denies a hearing is not "right, just and fair" and so violates Articles 14 and 21. A breach can therefore be raised directly under Article 32.

Its landmarks are Cooper v. Wandsworth (1863); Ridge v. Baldwin (1964); Maneka Gandhi (1978); Swadeshi Cotton Mills v. Union of India (1981) on the post-decisional hearing; Olga Tellis v. Bombay Municipal Corporation (1985); and National Textile Workers' Union v. P.R. Ramakrishnan (1983), where workers were held entitled to be heard in a winding-up petition although the statute did not name them.

5. The third rule: the reasoned order. Siemens Engineering v. Union of India (1976), S.N. Mukherjee v. Union of India (1990), Mohinder Singh Gill v. Chief Election Commissioner (1978).

6. Exceptions. Statutory exclusion; emergency, subject to a post-decisional hearing; impracticability (Bihar School Examination Board v. Subhas Chandra Sinha, 1970); legislative action; confidentiality and security of the State; the narrow "useless formality" exception; purely administrative or contractual matters; interim preventive measures; waiver; and the second proviso to Article 311(2) as construed in Union of India v. Tulsiram Patel (1985).

For full marks, cover: the definition and characteristics of a corporation; the classification into corporation sole and aggregate, and then into statutory, registered and chartered; the functional classification of public corporations with real Indian examples; the reasons for the public corporation; its control; and the Article 12 case law, which is the administrative-law point of the question.

1. Definition. A corporation is an artificial or juristic person created by law, having perpetual succession and a common seal, distinct in law from the natural persons who compose it, and capable of holding property, entering into contracts, and suing and being sued in its own name.

Salmond defines a corporation as a group or series of persons which by legal fiction is regarded and treated as a person.

2. Statutory corporations, created by a special Act of Parliament or of a State legislature, which fixes their objects, powers, capital and management. Examples: the Life Insurance Corporation of India (LIC Act, 1956), the Reserve Bank of India (RBI Act, 1934), the Food Corporation of India (1964), the Damodar Valley Corporation (1948), the Airports Authority of India, and the State Road Transport Corporations under the Road Transport Corporations Act, 1950.
3. Registered or Government companies, incorporated under the Companies Act. A Government company is defined by Section 2(45) of the Companies Act, 2013 as a company in which not less than 51 per cent of the paid-up share capital is held by the Central Government, by a State Government, or partly by both, and includes a subsidiary of such a company. Examples: Steel Authority of India, Bharat Heavy Electricals, Coal India, Oil and Natural Gas Corporation.

5. The functional classification of public corporations.

1. Commercial and industrial, running an undertaking for profit or on business lines: Steel Authority of India, Indian Oil.
2. Financial, providing credit and insurance: Reserve Bank of India, Life Insurance Corporation, National Bank for Agriculture and Rural Development.

2. Governmental: appointment and removal of the board, directions on questions of policy, approval of the budget, borrowings and regulations, inspection and inquiry, and supersession in default;
3. Judicial: the doctrine of ultra vires, writs under Article 226, ordinary suits in contract and tort, and the fundamental rights where the corporation is "the State";
4. Public: the Right to Information Act, 2005, consumer councils, the press, the Central Vigilance Commission and the sectoral regulators.