JUDGMENT
B. Sudershan Reddy, J.
1. The appellant-writ petitioner prays for a Writ, order and directions, particularly one in the nature of Certiorari quashing the imposition of two minor penalties of ‘censure’ dated 12-7-1984 and 30-10-1985, (2) direct the 1st respondent-Bank to consider his case and correct his Seniority and quash the orders of promotions of July, 1983, July-August, 1984 and April, 1986 of the Respondents 4 to 16 in the writ petition and (3) restrain the 1st respondent-Bank from holding Departmental Promotion Committee without granting him Proforma promotion in conformity with the seniority-cum-merit on the basis of the seniority list as at June, 1983.
2. The relevant facts necessary for adjudication of the writ appeal in brief maybe summarised. The appellant-writ petitioner entered the service of the 1st respondent- Punjab National Bank as a Probationary Officer on2-2-1963 and on successful completion of the probationary period and after having undergone the necessary training, the petitioner was confirmed as on Officer and posted at the Branch Office at Guntur in 1966 as an Accountant. He was thereafter promoted successively as Officer-in-Charge in 1971, Manager Scale II in 1973, Development Manager Scale III in 1976, Area Manager AA Grade in 1977 and Regional Manager Scale IV in September, 1980 and posted in the newly created Region of Bangalore. After the bifurcation of the Bangalore region in February, 1981, the appellant-writ petitioner was posted as Regional Manager for Andhra Pradesh Region with headquarters temporarily at Bangalore till 8-4-1981 on which date the regional office was shifted to Hyderabad. The appellant- petitioner continued as Regional Manager of Andhra Pradesh Region upto 22-8-1983. Admittedly, the appellant petitioner was served with a charge sheet on 7-7-1983 when he was working as Regional Manager, Andhra Pradesh Region at Hyderabad. The appellant submitted his explanation on 8-7-1983. However, an Enquiry Officer was appointed to make enquiry and ultimately the appellant-petitioner was imposed with the punishment of censure’. He preferred an appeal against the said imposition of punishment on 16-7-1984 to the Executive Director of the 1st respondent-Bank and the said appeal was rejected. Thereafter, the appellant preferred a Review Petition and the same was also rejected on 12-8-1986. The appellant-writ petitioner claims and asserts that he had unblemished record of service and the charge sheet dated 2-7-1983 was issued to him with a view to mar his chances for promotion. He submits that he was not promoted in July, 1983 and also in the subsequent selections in July/ August., 1984 as an Officer from Scale IV to Scale V in the 1st respondent-Bank. The 1st respondent-Bank again imposed another penalty of censure’ by an order dated 30-10-1985. The appellant-writ petitioner asserts that both the ‘censures’ were imposed upon him with a mala fide intention of depriving him of promotion. He had made certain serious allegations against the then Chairman of the 1st Respondent-Bank. According to the appellant-petitioner, it was the then Chairman of Bank who was responsible in depriving him of his promotion for which he was legitimately entitled. He asserts that he was not promoted on both the occasions in 1983 and 1984 as the Departmental Promotion Committee has taken into consideration the two punishments of ‘censure’ imposed upon him by the disciplinary authority.
3. The appellant-petitioner further submits that his appeal against the second ‘censure’ dated 30-10-1985 to the Chairman and Managing Director was rejected on 30-1-1987 without assigning any reasons. It is specifically averred that the 1st respondent Bank constituted two Departmental Promotion Committees, one in July/August, 1984 and another in April, 1986. In August, 1984/ the Departmental Promotion Committee approved the selection of Respondents 5 to 8 and in April, 1986, approved the selection of respondents 9 to 16 and consequently, they were promoted as Officers to Scale V. The appellant complains that all the respondents 4 to 16 are juniors to him. It is also stated that his case was not at all considered in April, 1986 and even if it was considered/ it was rejected on the basis of the alleged punishments of ‘censure’ standing against him.
4. It is also alleged that his promotion was not considered by the Departmental Promotion Committee on the ground of certain adverse entries in his record which remained uncommunicated to him.
5. Respondents 1 to 3 filed a detailed counter-affidavit controverting and disputing the material allegations made by the appellant-writ petitioner against them. The appellant-petitioner’s assertion of his having unblemished record of service is seriously disputed and it is pointed out that the appellant- petitioner was repeatedly cautioned to be careful right from 1981 and also on 22-6-1983 by the General Manager (Administration) for committing irregularities in the matter of appointment of clerical staff in the year, 1982. It is stated that the appellant-petitioner was censured twice on 30-6-1984 and 31-10-1985 after holding departmental enquiry. He was also warned on 19-11-1986 in connection with the fraud committed by the clerk/cashier in the Regional Manager’s Office at Hyderabad. It is asserted that the charges were framed against the appellant for the irregularities committed by him while sanctioning advances without proper appraisal and allowing advances to ineligible borrowers who are not covered under the scheme of the bank. The charges were based on material on record and as such question of harassment does not arise. It is also asserted that the punishment of ‘censure’ imposed upon the petitioner cannot be questioned after a period of three years that too in a collateral manner. The punishment of “censure’ was imposed upon the appellant-writ petitioner after following the required procedure and holding disciplinary enquiry in accordance with law. It is averred that the appellate authority considered the contentions raised by the appellant-petitioner and his appeal was dismissed on 21-11-1984 and the review filed by him against the said order was received on 18-11-1985, after almost a period of one year, without giving any cogent reasons for the delay and therefore, the same was also dismissed. It is further stated that the petitioner’s case was considered alongwith other eligible candidates in the year, 1983 but was found not suitable for further promotion as an Officer in Scale V. The allegations made by the appellant- petitioner that he was not considered for the reason of his earlier censure, is seriously disputed. It is submitted that the promotion from Scale IV to Scale V and above were not on the basis of seniority alone and the same is on the basis of assessment of past performance and potentiality for shouldering higher responsibilities. It is also submitted that at any rate, the promotions made in the year, 1983 cannot be allowed to be questioned in the year, 1987 after along lapse of four years and also particularly in view of the fact that his case was again considered by the Departmental Promotion Committee in the year, 1984. It is stated that the appellant-petitioner was not eligible for consideration for promotion in April, 1986 in accordance with the promotion policy, firstly on account of the fact that he was rejected in the two selections referred to here in above and also secondly for the reason that two minor penalties had been imposed upon him by way of ‘censure’, one on 30-6-1984 and another on 31-10-1985. It is specifically submitted that as far as the punishment of censure is concerned, the total effect of the punishment had lapsed on its own by the time when the writ petition was filed and no relief could be granted in this regard.
6. It is urged on behalf of the appellant-writ petitioner that he became victim in the hands of Shri Baluja, the then Chairman of the 1st respondent Bank and was subjected to harassment and victimisation. Certain allegations of mala fides are made against the said Baluja. The appellant submits that he was deprived of his promotion both in the years 1983 and 1984 only on account of the mala fides on the part of the then Chairman of the 1st Respondent Bank. The then Chairman of the 1st respondent-Bank is not impleaded as a party in person to the writ proceedings. This aspect of the matter is very elaborately considered by the learned single Judge and held as follows:
“On 27-1-1983, the petitioner as Regional Manager of R-l Bank, Hyderabad, recommended term loan for the three firms referred to above, to the Assistant General Manager, R-l Bank, Madras. The latter sanctioned on February, 1983 the term loans to the above three firms, on the recommendation of the petitioner. On 2-4-1983, the petitioner addressed a letter to the Manager, Sanath Nagar, Hyderabad Branch of R-1 Bank for necessary clarification. On receipt of the reply from the above Bank Manager, the petitioner himself as Regional Manager (for short ‘R.M.’) of R-1 Bank, at Hyderabad, recommended to Assistant General Manager (for short ‘A.G.M.’) of R-1 Bank for enhancement of the limits of term loans to the above three firms. As per the said recommendation, A.G.M., enhanced the limits to the above three firms in question by June, 1983. Those three firms were converted into a Private Limited Company in January, 1984. The Zonal Manager of R-1 Bank at Hyderabad refused on 2-2-1984 for sanction of the loans to the said Bank (sic ‘firms”) as the limit exceeded. On 18-2-1984, the General Manager of R-1 Bank pointed out the irregularities in the original sanction of loans to these three firms and the said Note was approved by the then Chairman of R-1 Bank. On 13-6-1984, Sri R. Trehan, son-in-law of Sri Baluja became Director of this Private Limited Company. While it was urged for the petitioner that as he pointed out the irregularities in releasing the amounts towards term loans of the three firms referred to, the then Chairman of R-1 Bank had prejudiced against the petitioner. It was stated for the respondents that the petitioner himself recommended to A.G.M., the sanction of term loans to these three firms and after they were sanctioned, and after getting clarifications from the Brands Manager, Sanathnagar, the petitioner again recommended to the A.G.M., for the enhancement of the limits to these three firms and the recommendations of the petitioner were accepted by A.G.M., on both the occasions, and in such a case the Chairman of R-1 Bank could not have any prejudice against the petitioner, even if he was interested in these three firms, and his son-in-law had became one of the Directors of this Private Limited Company, only after 11 months after the first charge sheet was issued to the petitioner and thus, there is no material to establish that the then Chairman had interest in these three firms. It was further argued for R-1 to R-3 that even in February, 1984 i.e., about four months before his son-in-law had become the Director of this Company, the then Chairman brought to the notice of the Board of Directors of R-1 Bank about the irregularities committed in sanctioning loans to these three firms and he would not have done so if by then he had interest in these three firms.-”
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“It was also stated for R-1 to R-3 that in the explanation submitted in 1986, with reference to the irregularities in the loans sanctioned to these three firms, the petitioner had not even whispered that the then Chairman pressurised him or instructed him to recommend sanction of term loans or enhancement of the limits to the three firms even though more than one year prior to it, the then Chairman left R-1 Bank. Thus, the petitioner had come up with such a false allegation of mala fides for the purpose of this writ petition.”
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“When it was stated for R-1 to R-3 that the petitioner himself as R.M., of R-1 Bank at Hyderabad recommended for sanction of term loans to these three firms in June, 1983, and also for enhancement of limits to these three firms on 5-4-1983 and those loans and enhancements were sanctioned by A.G.M., the same was not challenged for the petitioner. The petitioner is relying upon his letter dated 2-4-1983 to the Branch Manager, Sanathnagar, to urge that the petitioner pointed out the irregularities in releasing the loan amounts to these three firms, even when the conditions stipulated were not complied with and hence that letter irked Shri Baluja, the then Chairman of R-l Bank and so, he issued the first charge sheet and it also marred his chances for promotion. But after receiving the reply from the Branch Manager, Sanath nagar to his letter dated 2-4-1983, the petitioner as R.M., of R-1 Bank at Hyderabad, recommended by his letter dated 5-4-1983 to A.G.M., for the enhancement of the limits of loans to these three firms and the same was sanctioned by A.G.M. In such a case, there was no scope for any prejudice on the part of the then Chairman of R-1 Bank as against the petitioner, even if the then Chairman had interest in these three firms, as rightly urged for R-1 to R-3. There is also force in the contention for R-1 to R-3 that if in fact the then Chairman had grouse against the petitioner in connection with the sanction of loans to these three firms, the petitioner would have certainly referred to the same in the explanation given by him in 1986 for about one year prior to it, Sri Baluja left this Bank. Hence in view of the material on record, it has to be stated that there is no basis for the mala fides alleged against Sri Baluja, the then Chairman of R-1 Bank.”
7. Nothing is suggested and no material is brought to our notice as to why we should not accept the finding given by the learned single Judge rejecting the allegations of mala fides against the then Chairman of the 1st respondent-Bank. We are of the further opinion that the petitioner had made these allegations only for the purpose of making allegations and without any seriousness. There is no justification whatsoever and no explanation is offered as to why the then Chairman of the 1st respondent Bank was not impleaded as eo-nominee party to this writ proceedings. No adverse comments and no inference can be drawn against the then Chairman without giving him an opportunity of being heard. “The allegations of mala fides are often more easily made than proved and the very seriousness of such allegations demands proof of a high order of credibility. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration.- not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up- these considerations are wholly irrelevant in judicial approach – but because otherwise functioning effectively would become difficult in a democracy. It is from this standpoint that we must assess the merits of the allegations of mala fides made by the petitioner. E.P. Royappa v. State of Tamil Nadu: “.
7-A. The then Chairman Shri Daluja left the 1st respondent-Bank in February, 1985 and the appellant petitioner while submitting his explanation in 1986 with regard to the allegations of irregularities in release of term loans to the three firms in whom Shri Baluja alleged to have had an interest had not stated that at the instance or due to the pressure from Shri Baluja, he recommended the term loans to those firms or he instructed the Branch Manager to release those loans in an illegal manner without complying with the necessary conditions thereof. Obviously, the allegations against the then Chairman of the Bank are made by the appellant-petitioner in the writ petition as an after-thought.
8. We are in complete agreement with the finding of the learned single Judge on this aspect and reject the plea put forth by the appellant in this regard.
9. Now we will proceed to consider as to whether the petitioner’s case for promotion from Senior Management Grade Scale IV to Senior Management Grade Scale V was considered by the Departmental Promotion Committee and if so, whether it was properly considered in accordance with the promotion policy of the 1st respondent-Bank. There is no dispute that Regulation No. 17 of the Punjab National Bank (Officers) Service Regulations, 1979 (for short ‘the Regulations’) stipulates that “promotion to all grades of officers in the Bank shall be made in accordance with the policy laid down by the Board from time to time having regard to the guidelines of the Government, if any.” In terms of Regulation 17of the said Regulations and having regard to the guidelines of the Government, the Board of Directors of the 1st respondent-Bank framed the ‘PROMOTION POLICY FOR OFFICERS’ in the Bank and issued revised Circular No. 568 dated 25-3-1981. There is no dispute that the same is applicable to the officers working in the 1st respondent-Bank including the petitioner. Item 6 of the said Promotion Policy reads thus:
6. Promotion from Senior Management Grade Scale IV to Senior Management Grade Scale V (Rs. 2500-100-2700)
Eligibility: No minimum service is prescribed. Officers will be considered in order of seniority.
Process of Selection: Number of persons to be considered in order of seniority shall not be less than two times and not more than three times the number of vacancies. They will be rated on the basis of their performance in the existing jobs and potential for higher responsibilities.”
So far as promotions upto Senior Management Grade Scale IV, the concerned officers may be called for interview in order of seniority and the selection shall be on the basis of marks obtained under various heads such as performance, interview and seniority and the rating thereof and whereas the process of selection from Senior Management Grade Scale IV to Scale V and upwards, there is no interview as such contemplated and no minimum service is also prescribed. Officers would be considered in order of seniority and the number of persons to be considered in order of seniority shall not be less than two times and not more than three times the number of vacancies. The Officers will be rated on the basis of their performance in the existing jobs and the potential for higher responsibilities. Evidently, the entire service record and appraisal reports would have to be taken into consideration so far as promotions from Senior Management Grade Scale IV to Scale V and upwards is concerned.
10. There is absolutely no doubt whatsoever that the petitioner’s case was considered along with 18 other eligible officers in Scale IV for promotion in July, 1983 to Scale V. Amongst the 19 eligible candidates who were considered for promotion, the petitioner was 17th in rank in order of seniority. Only 6 officers were promoted and except the 4th respondent herein who was the last of the 19 candidates, the rest of the 5 officers were evidently senior to the appellant- petitioner. In the said selection, 11 officers in Scale IV who were seniors to the appellant-petitioner were not promoted, and whereas in July/August 1984, the Departmental Promotion committee considered, in all, the cases of 29 officers in Scale IV to Scale V. The appellant was ranked again at 11th place in the order of seniority. In this batch, 11 officers were promoted and out of them 5 officers are juniors to the appellant-petitioner who are respondents 5 to 9 herein. In that batch also, 4 officers who are admittedly seniors to the appellant- petitioner could not get promotion.
11. It is pertinent to note that no bias as such is attributed to the Departmental Promotion committee or any of its members. No allegations are made against them. The proceedings of the Departmental Promotion Committee held in July, 1983 are made available to the Court. The proceedings would disclose that the appellant-petitioner’s case was considered by the Departmental Promotion Committee (DPC) and DPC came to the conclusion that “his performance so far has not been upto the mark. Although the Region under his control has only 22 branches, yet he has little control over credit, cash management and recovery of priority sector advances. He has also not done well in development of business. We do not consider him fit for promotion at this stage.” The Departmental Promotion Committee meeting held on 19-7-1984 again considered the appellant-petitioner’s case and observed:
“He did not show any initiative and drive in his assignment. His knowledge of credit management particularly in the appraisal of industrial loans as also controls was found to be very poor. During his tenure, growth of real profits was poor and there was large scale window dressing resulting in post-closing decline of 14.2%. Recovery position was very unsatisfactory and there was no proper follow-up, control and audit was poor and scrutiny of loan proposals was weak.———————-His public relations were poor and he did not keep proper liaison with the defence establishment in Hyderabad. Shri Rao was, therefore, not promoted in July, 1983.- Since he has not shown any marked improvement in his performance so far, we do not consider him fit for promotion yet.”
12. The proceedings of the DPC would disclose that the petitioner’s case was considered along with other candidates and reasons in respect of each candidate is assigned by the Departmental Promotion Committee. It is difficult for this Court to express any opinion on the merits of the decision taken by the Departmental Promotion Committee. The High Court, in exercise of its extra- ordinary jurisdiction under Article 226 of the Constitution does not sit and discharge the functions akin to that of an appellate authority. The Court cannot re-appraise or re-evaluate the decision of the selection committee or the Departmental Promotion Committee as the case may be. Normally, the Court can (sic. cannot) substitute its own opinion for that of the competent body entrusted with the process of Selection. True, the Court is definitely concerned with the decision making process of the authority concerned and if the decision making process is vitiated for the reason of any irregularity or illegality resulting in injustice, the same would be definitely corrected by this Court by issuing an appropriate writ or direction. This Court would not interfere merely because there is a possibility of taking another view than that of the competent authority. The appellate authority can definitely go into the question of the correctness of the decision of the Departmental Promotion Committee and can consider the matter afresh on merits and is entitled to reach at a different conclusion and hold that the decision of the authority was wrong in the circumstances. The appellate authority, for the said purpose, may reconsider and re-evaulate the material evidence and re-assess the performance of the officer.
13. There is no dispute that the promotion from Senior Management Grade Scale IV to Scale V is not based upon seniority alone. When a promotion is based on the principle of seniority-cum-merit, a person cannot claim promotion as a matter of right by virtue of seniority alone. If he is found to be unfit to discharge the duties of a higher post, he may be passed over and an officer junior to him may be promoted. An employee has a right to be considered for promotion but has no right to be promoted. In the instant case, the Departmental Promotion Committee was under legal obligation to consider and assess the performance of the appellant-petitioner in the existing job and his potential for higher responsibilities. May be, the assessment should be made always based upon the objective material. It is true that the promotion and Selection to the higher post does not depend upon the whim or wish of the Departmental Promotion Committee.
“It is well known that a selection Board while considering the suitability of an officer for promotion to higher post or rank into consideration several factors and it is not solely based on the appraisal report of the controlling officer- The Court cannot encroach over this power by substituting its own view and opinion. See: Air V. Marshall S.L Chhabar VSM (Rtd.) v. Union of India (1993 (II) LLJ 658) Major General IPS Dewan v. Union of India “.
14. We have already expressed our opinion that the appellate authority can definitely go into the question about the correctness of the decision of the Departmental Promotion Committee and can reappreciate the whole issue. The appellate authority can come to an independent conclusion that the appellant herein would have to be rated better and can arrive at an appropriate decision as to whether the appellant herein has the potential for higher responsibilities. For the view we propose to take that the appellate authority has to reconsider the matter, we make it clear that we have not expressed any opinion on the merits of the case of the appellant herein as such.
15. Records were made available to this Court for our perusal. The record would also disclose that there was no order of censure against the appellant petitioner by the time his case was considered by the Departmental Promotion Committee in July, 1983. However there was only one order of censure as a disciplinary measure imposed upon the petitioner when his case was considered at the time of selection for promotion in July /August, 1984, but the rejection of the appellant’s case was not on account of the earlier punishment of censure’ but was on a consideration of his case along with other eligible candidates. However, his case was not considered at the time of selection in 1986 and it was on two grounds vis., (1) that he failed to get promotions on two successive attempts i.e., in 1983 and 1984 and (2) as there were two orders of censure within three years by the date his case could have been considered in 1986. The Promotion Policy would disclose that both the grounds are sufficient to make the petitioner ineligible for consideration in the year, 1986. We have already indicated that we do not propose to go into the issue as to whether the punishment by way of censure is legal or not. It is not directly in issue and also in our opinion it is a belated attempt on the part of the appellant-petitioner and that too in a collateral proceeding, as evidently, the main grievance of the appellant-writ petitioner in this case relates to his promotion to Senior Management Grade Scale V.
16. It is, however submitted by Shri Y. Suryanarayana, learned counsel for the appellant-petitioner that the appellate authority dismissed the appeal without assigning any reasons. It is his submission that the appellate authority was bound to consider the appeal of the petitioner on merits. Shri M. Narahari, learned counsel appearing for the bank counters the said argument and submits that the appellate authority need not give any separate and detailed reasons inasmuch as the appellate authority has merely confirmed the decision of the Departmental Promotion Committee.
17. The appeal was disposed of by the Directors Promotion Committee held on 10-1-1986 and the proceedings of the said Committee read thus:
“The Committee decided not to interfere with the decision of the D.P.C. held on 29th July, 1984, subject to the proviso that the representations of S/Shri M.S. Gupta, S.P. Sinha and R.G. Pujar may be reviewed at the time of considering promotions from Scale IV to Scale V.
The representations of Dr. S. Singh and Dr. H.S. Dhillon were not considered as these are sub judice.”
18. The minutes and proceedings of the Directors Promotion Committee would not disclose as to in what manner the appeal preferred by the appellant was considered. No reasons are assigned as to why the appeal preferred by the appellant-writ petitioner was rejected. The Committee merely decided not to interfere with the decision of the D.P.C, dated 29-7-1984. The Promotion Policy itself gives right of appeal to an aggrieved officer in case he feels that his case for promotion has not been properly dealt with. Item 9 (g) of the Promotion Policy reads as follows:
“Any officer who feels that his case for promotion has not been properly dealt with may appeal to the Managing Director/Executive Director who shall constitute a 3 member committee consisting of officers not below the rank of Senior Management, to process the appeals and submit to him their recommendations. The decision of the Managing Director/Executive Director in respect of these appeals shall be final. In respect of promotions to Senior Management Grade Scale V and above the decision of the Board of Directors shall be final”.
A plain reading of the policy would disclose that the Board of Directors is under an obligation to ‘decide’ the matter. The appeal is to be considered on merits. It is not as if the decision of the appellate authority would have no civil consequences. The officer’s right to be considered for promotion is to be decided in the appeal preferred by an aggrieved officer. The career prospects of an aggrieved officer depend upon the decision of the appellate authority, viz., Board of Directors in case of promotions to Senior Management Grade Scale-V and upwards.
19. The word ‘decision’ connotes the meaning as (1) ‘an act of deciding or settling a dispute or question by giving a judgment”; (2) “an act of making up one’s mind’; (3) “a judgment or conclusion reached or given”; (4) “determination; firmness of mind”. (See Webster’s New World Dictionary, Third College Edition).
20. We have already extracted the decision of the appellate authority. We have also perused the records made available to us. Neither the decision itself nor the record would disclose any reasons what so ever given by the appellate authority in support of its ‘decision’. ‘Decision’ is not an empty formality, but involves application of mind. Atleast the record should indicate the application of mind by the appellate authority.
21. The Apex Court in Union of India v. M.L. Capoor, observed thus:
Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the facts considered and the conclusions reached.”
22. In order for this Court to meaningfully exercise the power of judicial review on the decisions of the appellate authority, the decision must be sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate decision on each issue was reached. The failure of an administrative agency to give adequate reasons with regard to the matter in issue renders its conclusions arbitrary and capricious. The reasons should demonstrate that there is a logical and legal basis for the ultimate conclusions and without such reasons, this Court cannot perform its duty of judicial review of an administrative action in accordance with established legal principles and of protecting the parties and the public from arbitrary and capricious administrative action.
23. In Breen v. Amalgamated Engineering Union, (1971) 2 Q.B.175, Lord Denning summarised the law thus:
“If the rules set up a domestic body and give it a discretion, it is to be implied that that body must exercise its discretion fairly. Even though its functions are not judicial or quasi-judicial, but only administrative, still it must act fairly. Should it not do so, the Courts can review its decision, just as it can review the decision of a statutory body.”
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“——But if he is a man whose property is at stake, or who is being deprived of his livelihood, then reasons should be given why he is being turned down, and he should be given a chance to be heard. I go further. If he is a man who has some right or interest, or some legitimate expectation, of which it would not be fair to deprive him without a hearing, or reasons given, then these should be afforded him, according as the case may demand. The giving of reasons is one of the fundamentals of good administration”.
24. In the absence of reasons, it is impossible to determine whether or not there has been an error of law. Failure to give reasons, therefore, amounts to denial of justice.
25. ‘A party appearing before a Tribunal is entitled to know, either expressly stated by it or inferentially stated, what it is to which the tribunal is addressing its mind. In some cases, it may be perfectly obvious without any express reference to it by the tribunal; in other cases it may not. Second the appellant is entitled to know the basis of fact on which the conclusion has been reached. R. v. Immigration Appeal Tribunal (1983) 2 All E.R. 420″
26. The Court of Appeal in the said case was concerned with the decision at the stage of appeal and said:
“Consequently when, as in due course, the matter came before the appeal tribunal, one would have expected the issue to be perfectly plain and to have been set out perfectly plainly by the tribunal in its reasons.”
and referring to an earlier decision of Donaldson P in the Industrial Relations Court in Alexander Machinery (Dudley) Ltd. v. Crabtree (1974 ICR 120) in which it was held:
“The basis of this proposition is that in the absence of reasons it is impossible to determine whether or not there has been an error of law. Failure to give reasons, therefore, amounts to a denial of justice and is itself an error of law.——–The overriding test must always be: is the tribunal providing both parties with the materials which will enable them to know that the tribunal has made no error of law in reaching its findings of fact? We do not think that the brief reasons set out here suffice for that purpose.’ In the instant case on hand, the order passed by the appellate authority is not supported by even brief reasons.
27. The law on this aspect is aptly summarised by Prof. Wade in Administrative law by H.W.R. Wade and Christopher Forsyth (7th edition) at page 542 as follows:
“Nevertheless there is a strong case to be made for the giving of reasons as an essential element of administrative justice. The need for it has been sharply exposed by the expanding law of judicial review, now that so many decisions are liable to be quashed or appealed against on grounds of improper purpose, irrelevant considerations and errors of law of various kinds. Unless the citizen can discover the reasoning behind the decision, he may be unable to tell whether it is revisable or not, and so he may be deprived of the protection of the law. Aright to reasons is therefore an indispensable part of a sound system of judicial review. Natural Justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man’s sense of justice. It is also a healthy discipline for all who exercise power over others. ‘No single factor has inhibited the development of English administrative law as seriously as the absence of any general obligation upon public authorities to give reasons for their decisions.”
Geoffrey A Flick in his treatise on NATURAL JUSTICE Principles and Practical application, 2nd edition, succinctly stated the principle in the following terms.
“Reasons are a valuable check on both the exercise of formal and informal decision making. They provide the means whereby a party is appraised of why a decision has been made and they provide some guidelines to those who have to advise the public as to the attitudes of the administrators.”
28. The appellate authority, in the instant case, consists of a committee of three Directors. There are no minutes available. It is desirable that the public bodies maintain the minutes leading to the decision and make them available to the Court whenever the decision is challenged in the writ petition. Judicial review of the decision of the public bodies becomes difficult in the absence of maintenance of such minutes. It is difficult to discern as to whether the appellate authority has applied its mind and particularly with reference to the grounds raised in the appeal. The record does not disclose that there was any meeting of minds of the members of the committee on the question on which they had taken decision.
29. It is settled law that giving of reasons in support of an order is the requirement of the principles of natural justice. The aggrieved party has a right to know not only the result of the decision, but also the reasons in support of the decision. Not only quasi-judicial orders, but also the administrative decisions involving the valuable rights of the citizens are required to be supported by reasons. May be in every case, the reasons as such in support of a decision may not be communicated, but the reasons must be available in the record and always must be made available to the higher Courts exercising the powers of judicial review. Administrative authorities and Tribunals in the country are slowly replacing the traditional Courts of law and are deciding variety of disputes and are called upon to interpret and apply various statutes, enactments, notifications and policies involving the valuable rights of the citizens.
30. The law in this regard is succinctly stated by the apex Court in Siemens Engineering and Mfg. Co. v. Union of India, as follows:
“If Courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases with the proliferation of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. The Government of India also failed to give any reasons in support of its order rejecting the revision application. But we may presume mat inrejecting the revision application, it adopted the same reason which prevailed with the Collector. The reason given by the Collector was, as already pointed out, hardly satisfactory and it would, therefore, have been better if the Government of India had given proper and adequate reasons dealing with the arguments advanced on behalf of the appellants while rejecting the revision application. We hope and trust that in future the customs authorities will be more careful in adjudicating upon the proceedings which come before them and pass. properly reasoned orders, so that those who are affected by such orders are assured that their case has received proper consideration at the hands of the customs authorities and the validity of the adjudication made by the customs authorities can also be satisfactorily tested in a superior tribunal or Court.”
31. Not only quasi-judicial decisions by the tribunals, but also administrative decisions are subjected to the judicial review, and an aggrieved person, as a matter of constitutional right, is entitled to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. It is, therefore, desirable that the administrative decisions should be supported by reasons and at any rate the reasons for the decisions must be made available to the Court when the decision is challenged before the Court for judicial review.
32. Recording of reasons by an administrative authority serves a salutary purpose as it ensures a degree of fairness in the process of decision-making and would also reveal the application of mind. It is true that the decisions of the administrative authorities need not necessarily be as elaborative as the decisions of a Court. If reasons are recorded, it will indicate that due consideration was given to the issues involved in the matter. It is pointedly held by the apex Court in S.N. Mukherjee v. Union of India, , thus:
“The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge.
The apex Court emphasised the need for recording reasons both by the original authority as well as by the appellate authority and took the view that recording of reasons at the original stage is much greater than at the appellate or revisional stage. It is clear that even the appellate or revisional authority is bound to give reasons. May be it is open to the appellate or revisional authority to reiterate the same reasons if at all given by the original authority or may give its own reasons, but recording of reasons is not altogether dispensed with. Every administrative decision is required to be fair-be it at the original stage or at the appellate stage and fairness is ensured only by giving reasons.
33. “The rule requiring recording of reasons in support of an order is a third principle of natural justice. See: Raipur Development Authority v. Chokhamal, (AIR 1990 SC 1426)”
34. In the instant case, the appellate authority failed to consider and decide the matter but merely give its conclusion and we hold that such conclusion cannot be said to be a decision. No reasons whatsoever are given by the authority in support of its conclusion and therefore, we have no other option except to set aside the order passed by the appellate authority and direct that the appeal preferred by the appellant-writ petitioner should be reconsidered and disposed of in accordance with law.
35. One another aspect remains to be considered. Admittedly, the case of the appellant-writ petitioner was not considered for promotion in the later selections from Senior Management Grade Scale IV to Scale V, even though the appellant was eligible for the same. It is submitted by the learned counsel for the respondents that the appellant-petitioner himself refused and did not respond to the notices issued to him for appearance at the interview which was introduced for the latter years for consideration for promotion from Senior Management Grade Scale IV to Scale V. We have asked the learned counsel for the Bank to produce any record to the effect as to whether the appellant- petitioner gave anything in writing giving up his claim for promotion. Learned counsel for the respondents expressed his inability to show any such record. There cannot be any doubt that the appellant-petitioner was ligible to be considered for promotion from Senior Management Grade Scale IV to Scale V in the subsequent selections from 1987 onwards. The action on the part of the respondents-Bank in ignoring his claim and refusal to consider his case at least from the year, 1987 onwards cannot be countenanced. Its action in this regard is totally untenable and unsustainable and cannot be supported.
36. For the reasons aforementioned (a) we set aside the order dated 10th January, 1986 passed by the appellate authority i.e., the Directors’ Promotion Committee and consequently direct the appellate authority to reconsider the appeal afresh in accordance with law; (b) there shall be a direction to the respondents to consider the appellant-petitioner’s claim for promotion from Senior Management Grade Scale IV to Scale V for the subsequent elections from the year 1987 and onwards, in case the appellant’s appeal to the appellate authority is not favourably considered and disposed of by the appellate authority; (c) the appeal shall be disposed of within three months.
37. With the directions as above, we modify the order of the learned single Judge and dispose of the writ appeal accordingly. There shall be no order as to costs.
