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Nor because there is an appeal to a Court. PRE |
Nor because it is a body to which a matter is referred by another body. PRE |
See Rex vs Electricity Commissioners In my opinion, a Court in 'the strict sense is a tribunal which is a part of the ordinary hierarchy of Courts of Civil Judicature maintained by the State under its constitution to exercise the judicial power of the State. Ratio |
These Courts perform all the judicial functions of the State except those that are excluded by law from their jurisdiction. Ratio |
The word "judicial", be it noted, is itself capable of two meanings. Ratio |
They were admirably stated by Lopes, L.J. in Royal Aquarium and Summer and Winter Garden Society vs Parkinson (2), in these words: "The word 'judicial ' has two meanings. PRE |
It may refer to the discharge of duties exercisable by a judge or by justices in court, or to administrative duties which need not be performed in court, but in respect of which it is necessary to bring to bear a judicial mind that is, a mind to determine what is fair and just in respect of the matters under con sidera... |
" That an officer is required to decide matters before him "judicially" in the second sense does not make him a Court or even a tribunal, because that only establishes that he is following a standard of conduct, and is free from bias or interest. PRE |
Courts and tribunals act "judicially" in both senses, and in the term "Court" are included the ordinary and permanent tribunals and in the term "tribunal" are included all others, which are not so included. PRE |
Now, the matter would have been simple, if the had designated a person or persons whether by name or by office for the purpose of hearing an appeal under section 111. PRE |
It would then have been clear that though such person or persons were not "Courts" in the sense explained, they were clearly (1) (2) , 452, 364 "tribunals". PRE |
The Act says that an appeal shall lie to the Central Government. PRE |
We are, therefore, faced with the question whether the Central Government can be said to be a tribunal. PRE |
Reliance is placed upon a recent decision of this Court in Shivji Nathubai vs The Union of India (1), where it was held that the Central Government in exercising power of review under the Mineral Concession Rules, 1949, was subject to the appellate jurisdiction conferred by article 136. PRE |
In that case which came to this Court on appeal from the High Court 's order under article 226, it was held on the authority of Province of Bombay vs Kushaldas section Advani (1) and Rex vs Electricity Commissioners (3) that the action of the Central Government was quasi judicial and not administrative. PRE |
It was then observed: "It is in the circumstances apparent that as soon as r. 52 gives a right to an aggrieved party to apply for review a lis is created between him and the party in whose favour the grant has been made. PRE |
Unless therefore there is anything in the statute to the contrary it will be the duty of the authority to act judicially and its decision would be a quasi judicial act. PRE |
" This observation only establishes that the decision is a quasi judicial one, but it does not say that the Central Government can be regarded as a tribunal. Ratio |
In my opinion, these are very different matters, and now that the question has been raised, it should be decided. Ratio |
The function that the Central Government performs under the Act and the Rules is to hear an appeal against the action of the Directors. Ratio |
For that purpose, a memorandum of appeal setting out the grounds has to be filed, and the Company, on notice, is required to make representations, if any, and so also the other side, and both sides are allowed to tender evidence to support their representations. Ratio |
The Central Government by its order then directs that the shares be registered or need not be registered. Ratio |
The Central Government is also empowered to include in its orders, directions as to payment of costs or otherwise. Ratio |
The (1) ; (2) ; (3) 365 function of the Central Government is curial and not executive. Ratio |
There is provision for a hearing and a decision on evidence, and that is indubitably a curial function. Ratio |
Now, in its functions Government often reaches decisions, but all decisions of Government cannot be regarded as those of a tribunal. Ratio |
Resolutions of Government may affect rights of parties, and yet, they may not be in the exercise of judicial power. Ratio |
Resolutions of Government may be amenable to writs under articles 32 and 226 in appropriate cases, but may not be subject to a direct appeal under article 136 as the decisions of a tribunal. Ratio |
The position, however, changes when Government embarks upon curial functions, and proceeds to exercise judicial power and decide disputes. Ratio |
In these circumstances, it is legitimate to regard the officer who deals with the matter and even Government itself as a tribunal. Ratio |
The officer who decides, may even be anonymous; but the decision is one of a tribunal, whether expressed in his name or in the name of ' the Central Government. Ratio |
The word "tribunal" is a word of wide import, and the words "Court" and "tribunal" embrace within them the exercise of judicial power in all its forms. Ratio |
The decision of Government thus falls within the powers of this Court under article 136. Ratio |
It is next argued by the learned Attorney General that there is no law to interpret or to apply in these cases. ARG |
He argues that since there are no legal standards for judging the correctness or otherwise of the order of the Central Government and the decision being purely discretionary, it is neither judicial nor quasi judicial but merely administrative, and that no appeal can arise from the nature of things. ARG |
Such a line was taken before the Committee on Ministers ' Powers by Lord Hewart, and the argument reminds one of what he then said that such decisions are purely discretionary and the exercise of such arbitrary power is "neither law nor justice or at all". Ratio |
Sir Maurice Gwyer also was of the opinion that an appeal could not be taken to Court against a Minister 's 47 366 decision even on the ground of miscarriage of justice, because that, in his opinion, was "putting a duty on the Court" which was "not the concern of the Court". Ratio |
This argument takes me to the heart of the controversy, and before I give my decision, I wish to say a few preliminary things. Ratio |
Article 47 B gives to the Directors a right to refuse to register shares in their absolute discretion, without giving reasons. Ratio |
In In re Gresham Life Assurance Society, Ex Parte Penney James, L.J. observed: "No doubt the directors are in a fiduciary position both towards the company and towards every shareholder in it. PRE |
It is very easy to conceive cases such as those cases to which we have been referred, in which this Court would interfere with any violation of the fiduciary duty so reposed in the directors. PRE |
But in order to interfere upon that ground it must be made out that the directors have been acting from some improper motive, or arbitrarily and capriciously. PRE |
That must be alleged and proved, and the person who has a right to allege and prove it is the shareholder who seeks to be removed from the list of shareholders and to substitute another person for himself. PRE |
But if it is said that wherever any shareholder has proposed to transfer his shares to some new member, the Court has a right to say to the directors, 'We will presume that your motives are arbitrary and capricious, or that your conduct is corrupt, unless you choose to tell us what your reasons were, and submit those r... |
That shows that the Directors are presumed to have acted honestly in the interests of the company and a case has to be made out against them. Ratio |
I shall only quote from another case, which summarises the position very aptly. Ratio |
In In re Hannan 's King (Browning) Gold Mining Company (Limited) (2), Lindley, M.R. is reported to have decided the case thus: "Their Lordships did not sit there as a Court of (1) (1872) Law Rep. 8 Ch.(2) , 367 honour; the question was whether the applicants had made out that the transferee was being improperly kept of... |
There was no evidence of that . PRE |
The Court ought, as a matter of honesty between man to man., to presume that the directors were acting within their powers unless the contrary was proved; but that was not proved by casting unfounded aspersions upon them." PRE |
Thus, the matter comes to this that the Directors have a presumption in their favour and the opposite party must prove that there was want of good faith. Ratio |
The right of appeal which is given under the , allows the Central Government to judge this issue. Ratio |
For that purpose, parties are required, if they desire, to make representations and to put in evidence. Ratio |
But to enable the parties to have a free say, the proceedings are made confidential by law, and there is protection against action, both civil and criminal. Ratio |
The appeal is disposed of on the basis of the representations and the evidence. Ratio |
A decision of a tribunal on a dispute inter partes, in the light of pleadings and evidence, is essentially a judicial one, and this Court ought to be able, on the same material, to decide in an appeal whether the decision given was correct. Ratio |
If no substantive law is applicable, there are questions of evidence, of burden and adequacy of proof and of the application of the principles of justice, equity and good conscience to guide the Court. Ratio |
Once it is held that the decision is that of a tribunal and subject to appeal, it is manifest that an appeal may lie, unless there be some other reason. Ratio |
The difficulty which arises in these cases is whether it was not the intention of the law that the decision of the Central Government was to be final. Ratio |
The law makes all allegations and counter allegations confidential. Ratio |
If Courts cannot compel disclosure of these allegations and the veil of secrecy drawn by law is not rent, then it appears to me that a further appeal can hardly be efficacious. Ratio |
In this view, in my opinion, this Court should not grant special leave in such cases. Ratio |
The situation which arises is not very different from what arose before the Judicial Committee in Moses vs 368 Parker, Ex Parte Moses (1). PRE |
The headnote adequately gives the facts, and may be quoted: "By Tasmanian Act No. 10 of 1858, section 5, disputes concerning lands yet ungranted by the Crown are referred to the Supreme Court, whose decision is to be final; and by section 8 the Court is directed to be guided by equity and good conscience only, and by t... |
In dealing with the case, Lord Hobhouse observed at p. 248: "The Supreme Court has rightly observed that Her Majesty 's prerogative is not taken away by the Act of 1858, but intimates a doubt whether it ever came into existence. PRE |
Their Lordships think that this doubt is well founded. PRE |
They cannot look upon the decision of the Supreme Court as a judicial decision admitting of appeal. PRE |
The Court has been substituted for the commissioners to report to the governor. PRE |
The difference is that their report is to be binding on him. PRE |
Probably it was thought that the status and training of the judges made them the most proper depositaries of that power. PRE |
But that does not make their action a judicial action in the sense that it can be tested and altered by appeal. PRE |
It is no more judicial than was the action of the commissioners and the governor. PRE |
The Court is to be guided by equity and good conscience and the best evidence. PRE |
So were the commissioners. PRE |
So every public officer ought to be. PRE |
But they are expressly exonerated from all rules of law and equity, and all legal forms. PRE |
How then can the propriety of their decision be tested on appeal? What are the canons by which this Board is to be guided in advising Her Majesty whether the Supreme Court is right or wrong? It seems almost (1) 369 impossible that decisions can be varied except by reference to some rule; whereas the Court making them i... |
If appeals were allowed, the certain result would be to establish some system of rules; and that is the very thing from which the Tasmanian Legislature has desired to leave the Supreme Court free and unfettered in each case. PRE |
If it were clear that appeals ought to be allowed, such difficulties would doubtless be met somehow. PRE |
But there are strong arguments to show that the matter is not of an appealable nature." PRE |
See also The ' berge vs Laudry (1). PRE |
The exercise of the powers under article 136 is a counterpart of the royal prerogative to hear appeals in any cause or matter decided by Courts or tribunals. Ratio |
But where the Articles of Association of a company give absolute discretion to the Directors and empower them to withhold their reasons, the appeal taken to the Central Government would involve decision on such material, which the parties place before it. Ratio |
If the allegations are made confidential by law and the Central Government in giving its decision cannot make them public, it is manifest that the decision, to borrow Lord Hobhouse 's language, "is not of an appealable nature". Ratio |
Whether the right to hear appeals generally against decisions of the Central Government acting as a tribunal be within article 136, in my opinion and I say it with great respect special leave to appeal should not be granted in such cases, unless this Court is able to rend the veil of secrecy cast by the law without ren... |
The argument is that the allegations are confidential only so far as the public are concerned but not confidential where Courts are concerned. Ratio |
The question is not that but one of practice of this Court. Ratio |
This Court should intervene only when practicable, and that can only arise if the parties agree not to treat the allegations as confidential. Ratio |
That, however, does not end the present appeals. Ratio |
Special leave has been granted, and I have held that the appeals are competent, even though such cases (1) 370 often may not be fit for appeal. Ratio |
In this case, there is no claim that any allegation was confidential. Ratio |
In fact, the appellants before the Central Government made it clear that they did not charge the Directors with "capricious or mala fide conduct" but only with arbitrary refusal, without stating any reasons. Ratio |
The appellant Company in its representation set out the history of previous refusals and the decisions of the High Court of Bombay and the Central Government, and made it clear that the action was taken in the interest of the Company. Ratio |
There are indications in the representation to show that on the previous occasion when these claimants were referred by the High Court and by Mr. K. R. P. Aiyengar, Joint Secretary, to the Civil Court, they did not go to Court to establish that the action was mala fide and capricious. Ratio |
Before the Central Government, they dropped that allegation, and confined the case to one of refusal without giving any reasons, and that was the plain issue before the Central Government. Ratio |
There was no evidence for the Central Government to consider, and the Articles of Association give the Directors an absolute discretion to refuse to register shares without giving any reasons, and, on the authorities quoted earlier, the Directors must be presumed to have acted honestly. Ratio |
There was thus no reason for the Central Government to reverse the decision of the Directors, and the fact that no reasons have been given when nothing was confidential, leads to the only inference that there was none to give. Ratio |
In my opinion, these appeals must succeed. Ratio |
I would, therefore, set aside the order of the Central Government, and allow the appeals with costs here and before the Central Government, if an order to that effect was passed by the Central Government. Ratio |
Before parting with the case, I may say that the Report of the Amendment Committee had recommended amendment of section 111, and it has been amended, inter alia, by the addition of sub section (5A), which reads: "Before making an order under sub section (5) on an appeal against any refusal of the company to 371 registe... |
That would stop the blind man 's buff under the unamended law! Ratio |
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