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Report No. 126

Chapter III

Welfare State, Wide Discretionary Powers and the Era of Administrators

3.1. The constitution of India seeks to set up a welfare State. 'If the State is to care for its citizens from the cradle to the grave, to protect their environment, to educate them at all stages, to provide them with employment, training, houses, medical services, pensions and, in the last resort, food, clothing and shelter, it needs a huge administrative apparatus. Relatively, little can be done merely by passing Acts of Parliament and leaving it to the courts to enforce them.

There are far too many problems of detail, and far too many matters which can be decided in advance There must be discretionary power. If discretionary power is to be tolerable, it must be kept under two kinds of control; political control through Parliament and legal control through courts'.1 The legal aspects of all such matters are the concern of administrative law.

1. H.W.R. Wade Administrative Law, 5th Edn., p. 4.

3.2. The laissez faire doctrine implied that Government governs the best which governs the least. Welfare State to a considerable extent is an anti-thesis of laissez faire State. The State permeates every activity. Under the laissez faire doctrine, in England it was believed that until August 1914, a sensible law-abiding Englishman could pass through life and hardly notice the existence of the State, beyond the post office and the policeman.1

From laissez faire to welfare State, one has to catch the proliferation of the State activities. And once the State proliferates its activities and touches the citizen at every point of his life, the administrator acquires a high visibility profile. Dean Roscoe Pound observed that 'as the 18th and the fore-part of the 19th century relied upon the Legislature and the last half of the 19th century relied upon the courts, the 20th century is no less clearly relying upon the administration'.2

The situation portends its further projection into 21st century and many more centuries to come. Expanding activities of a welfare State brought in agencies and instrumentalities of the State, called public sector undertakings. Their presence 'indicate a likely increase in the incidence of encounter between private individuals and public officials and consequentially, a greater need for an official authority or authorities to which the former can resort to for the redress of non-legal wrongs'.3

1. A.J.P. Taylor English History, 1914-1945, p. 1.

2. Dean Roscoe Pound The Administrative Application of Legal Standards, (1919) 44 A.B.A. Report 445 at 446; also see control of Executive Officers of Government by S.M. Huang, Journal of Indian Law Institute, Vol. 5, (1963), p. 171.

3. Ibid., pp. 187-188.

3.3. Existence of wide discretionary power opens up a potential area either of its likely abuse or misuse. In either view of the matter, the one who feels injustice at the hands of administration is likely to seek redress of his wrong, genuine or assumed, by resort to proceedings before the court or tribunal. If there is a tribunal, we can grant him relief. Since the independence, the docket explosion can be largely attributed to the expanding State activities in the field of industry, commerce, trade, education, medicare, old age pensions and several others. These activities of the State confer benefits and occasionally State largesse.

The proliferation of governmental activities as well as the activities of its instrumentalities directly contributing to the ever-rising graph of litigation at all levels attracted the attention of those concerned with law reforms. It was noticed that the pattern of litigation in the last few years revealed that parties think fit and proper to approach the higher courts: (i) not only for redress regarding governmental acts which constitute an infringement of legal rights; (ii) but also for redress regarding governmental acts which, while they may or may not amount to infringement of a legal right, constitute instances of maladministration.

To illustrate, preventive detention laws confer power to detain without trial and ordinarily every order of detention is questioned by a petition for writ of habeas corpus complaining that the detenu has been deprived of his personal liberty by orders illegal and invalid or entirely unjustified. This type of litigation raises issue of infringement of legal and constitutional rights.

The power of the State to arrange equitable distribution of scarce resources and orderly development and growth of the country confers power of regulatory nature by granting licences. Refusal to give licence or preferring one amongst many for a licence gives rise to numerous litigation complaining of official apathy, oppression, unimaginativeness, lethargy or misunderstanding-these and similar factors are legitimately responsible for the parties seeking redress in courts1

1. LCI, 100th Report dealing with Litigation by and against the Government.

3.4. It is impossible to envisage an ideal situation where discretionary power is utilised in such an ideal manner that the exercise of power would not give rise to some kind of litigation. In fact, the classical constitutional doctrine was that wide discretionary power was incompatible with the rule of law1. Even today, law frowns upon absolute discretion but conferment of wide discretionary power is inevitable. The only limitation sought is that its exercise can be controlled by available legal remedies.

Even if an effective regulatory and control machinery is devised, yet use of discretionary power is bound to give rise to disputes and controversies. Under the Constitution, Articles 32 and 226 confer power of judicial review of administrative and legal action. The challenge to exercise of discretionary power is by approaching the court which again multiplies litigation. Therefore, mounting litigation against the Government is interrelated largely with the exercise of executive administrative powers. They provide the causal connection.

"One must note that Government agencies do not seem to care to scrupulously comply with the law themselves, while they continually expect the citizen to do so. The present growth, which is phenomenal, in administrative law and adjudication is indicative of the fact that discretionary powers are being abused and courts are continuously embattled with the administration to ensure that they follow certain minimum standards of fairness in the exercise of their statutory, discretionary powers. The standards imposed are indeed minimal.

There is the requirement to give fair opportunity to the parties to be heard; there is the salutary rule that bias, whether personal or pecuniary, should not affect decision-making; there is the rule that reasons should be given by the authorities making a decision affecting the citizen the formulation of these requirements by courts has always been crystal clear; but the underlying message is that every attempt be made by the administration to be scrupulously fair, and to ensure that the rules themselves are tolerably clear.

And yet cases in which violations of natural justice occur in decision-making by executive continue to come up before the courts and their number seems to be on the increase rather than declining Similarly, for example, government agencies, when they assume the role of management of public sector industries, are themselves unable to comply with the minimum rules of labour legislation."2

1. Dicey Law of Constitution, 9th Edn., 202.

2. Dr. Upendra Baxi The Crisis of Indian Legal System, pp. 81-82

3.5. Most of the litigation in which a public sector undertaking/Government is a party emanates from an unhealthy attitude on the part of the administrator not to act consistent with principles of natural justice in exercise of the power conferred upon him. But what at best are the principles of natural justice? Briefly stated, they have been put akin to fairness in action.

'What the requirements of fairness demand when anybody, domestic, administrative or judicial, has to make a decision which will affect the rights of individuals depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates.

In particular, it is well established that when a statute has conferred on any body the power to make decisions affecting individuals, the courts will not only require the procedure prescribed by the statute to be followed, but will readily imply so much and no more to be introduced by way of additional procedural safeguards as will ensure the attainment of fairness.1

If this is the requirement, no administrator can grudge it. Some how or other, there is a visible tendency to disregard it. The worst feature comes in when an administrator does not extend this normal principle of fairness to one working either in the Department or under him and supports the so-called domestic inquiry loaded against the so-called delinquent officer. Board of Trustees of the port of Bombay resolved to hold a departmental inquiry against one of its officers for an alleged misconduct. Before the inquiry opened, the delinquent officer submitted a request seeking permission to engage a legal practitioner for his defence.

Even though the Board had appointed an inquiry officer with a legally trained mind to be assisted by a presenting-cum-prosecuting officer who again was a legally trained mind to represent the employer, yet the eminently reasonable request of the delinquent officer was turned down and then proceeded with the inquiry, at the conclusion of which the officer was dismissed from service. The victim of such an inquiry questioned the correctness, validity and fairness of the inquiry by filing a writ petition in the High Court of Bombay.

The learned single Judge of the High Court, by his judgment and order, quashed and set aside the order of dismissal, inter alia, holding that while appointing two presenting officers, both legally trained, the Chairman of the public sector undertaking failed to afford a reasonable opportunity to the delinquent officer to defend himself by refusing him permission to appear through a legal practitioner and thereby the principles of natural justice are violated.

Not satisfied with this eminently judicial and judicious decision, the public sector undertaking, disclosing crass wooden-headed approach of a type of legalism not tenable in the developing notions of fairplay action, preferred an appeal to the Division Bench of the High Court, which was rightly rejected in limine. The climax was reached when a public sector undertaking reached the Supreme Court by way of an appeal under Article 136 of the Constitution.

Commenting upon the unfair attitude of the public sector undertaking, the Court pointed out that where an inquiry is likely to affect livelihood or attach a stigma to the person inquired against, the inquiry must be heard according to the principles of natural justice and one of the requirements would be that if an employer is assisted by legally trained mind in presenting the case, denial of that opportunity to the other side would vitiate the inquiry.2

Every public servant every time he is teased and threatened or eased out and eliminated on oblique grounds cannot start a litigation, especially these days when man lives in the short run and litigation lives in the long run It has been rightly said that access to justice is the most human right and in this sense, processual jurisprudence relating to public sector servants must be designed with an eye on modernised judicial management. Traditionalism and obscurantism restrict writ jurisdictions so much, so many public sector employees suffer silently while audacious adventurists fight and win.3

1. Lloyd v. McMaohon, (1987) 2 WLR 821 ( 878-879).

2. Board of Trustees of the Port of Bombay v. D.R. Nadkarni, (1983) 1 SCC 124.

3. Justice V.R. Krishna Iyer Law Versus Justice, p. 148.

3.6. The activities of the Government and public sector undertakings cover a vast area and proliferate in many directions, threatened action may not come to its notice till it is initiated. It was assumed that Government would not indulge in frivolous litigation or would not litigate for extraneous or irrelevant reasons. In order to give an opportunity to the Government/public sector undertakings, it was statutorily decided to serve it with a notice of the intended cause of action so that if the Government/public sector undertaking desires to remedy the wrong or to reconsider its decision, it has full opportunity before it is dragged to the court.

That was the raison d'etre of the provisions like section 80 of the Code of Civil Procedure or an insistence by court before issuance of writs like the writs of mandamus to make a demand for justice and only thereafter come to the court. Over years it is found that the notice under section 80 of the Code of Civil Procedure, rather than serving the cause of justice by redressal of the wrong, sometimes hastens an action on the part of the Government to such extent as to force the other side to resort to litigation for with.

An unsavoury practice started from this by first filing the suit without notice and as soon as the Government appears and raises the contention, withdraw the suit and file a fresh one, the interregnum being used for purpose of serving the notice but during which period some interim relief is already obtained.

Government and Public Sector Undertaking - Litigation Policy and Strategies Back

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