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The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined Ratio |
A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case Ratio |
A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does if really satisfy the test of reasonableness Ratio |
Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself small be labelled as arbitrary Ratio |
Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary Ratio |
This Court's observations in G. B. Mahajan v. Jalgaon Municipal Council, AIR (1991) SC 1153 1990 Indlaw SC 438 are kept out of lush field of administrative policy except where policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates or where a decisio... |
But there has to be a word of caution Ratio |
Something overwhelming must appear before the Court will intervene Ratio |
That is and ought to be a difficult onus for an applicant to discharge Ratio |
The Courts are not very good at formulating or evaluating policy Ratio |
Sometimes when the Courts have intervened on policy grounds the Court's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance Ratio |
On the contrary, curial views of policy have been subjected to stringent criticism Ratio |
As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6th Edition) there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable Ratio |
The reasonableness in administrative law must, therefore, distinguish between proper course and improper abuse of power Ratio |
Nor is the test Court's own standard of reasonableness as it might conceive it in a given situation Ratio |
The point to note is that the thing is not unreasonable in the legal sense merely because the Court thinks it to be unwise Ratio |
In Hindustan Development Corporation's case1993 Indlaw SC 1085 (supra), it was observed that decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest where the doctrine of legitimate expectation can be applied Ratio |
If it is a question of policy, even by ways of change of old policy, the Courts cannot intervene with the decision Ratio |
In a given case whether there are such facts and circumstances giving rise to legitimate expectation, would primarily be a question of fact Ratio |
As was observed in Punjab Communications Ltd. v. Union of India of Others, AIR (1999) SC 1801 1999 Indlaw SC 1548, the change in policy can defeat a substantive legitimate expectation if it can be justified on "Wednesbury reasonableness PRE |
The decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy PRE |
It is, therefore, clear that the choice of police is for the decision-maker and not the Court PRE |
The legitimate substantive expectation merely permits the Court to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made PRE |
A claim based on merely legitimate expectation without anything more cannot ipso facto give a right PRE |
Its uniqueness lies in the fact that it covers the entire span of time; present, past and future PRE |
How significant is the statement that today is tomorrows' yesterday PRE |
The present is as we experience it, the past is a present memory and future is a present expectation Ratio |
For legal purposes, expectation is not same as anticipation Ratio |
Legitimacy of an expectation can be inferred only if it is founded on the sanction of law Ratio |
As observed in Attorney General for New South wale v. Quinn, [1990] 64 Australian LJR 327 to strike the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the Courts adrift on a featureless sea of pragmatism Ratio |
Moreover, the negotiation of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law Ratio |
If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power of violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14 but a claim based on mere legitima... |
It can be one of the grounds to consider, but the Court must lift the veil and see whether the decision is violative of these principles warranting interference Ratio |
It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the Courts for the review of administrative action must be restricted to the general legal ... |
It follows that the concept of legitimate expectation is 'not the key which unlocks the treasure of natural justice and it ought not to unlock the gates which shuts the Court out of review on the merits,' particularly, when the elements of speculation and uncertainty are inherent in that very concept Ratio |
As cautioned in Attorney General for New South wale's case the Courts should restrain themselves and respect such claims duly to the legal limitations Ratio |
It is a well meant caution Ratio |
Otherwise, a resourceful litigant having vested interest in contract, licences, etc. can successfully indulge in getting welfare activities mandated by directing principles thwarted to further his own interest Ratio |
The caution, particularly in the changing scenario becomes all the more important Ratio |
If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies Ratio |
As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed Ratio |
Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration Ratio |
A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly Ratio |
In determining whether there is any unfairness involved the nature of the right alleged to have taken infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time enter i... |
Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country Ratio |
See Parbhani Transport Co-operative Society Ltd. v. Regional Transport Authority, Aurangabad and Others, AIR (1960 Ratio |
SC 9011960 Indlaw SC 472; Shree Meenakshi Mills Ltd. v. Union of India, AIR (1974 Ratio |
SC 3651973 Indlaw SC 291; Hari Chand Sarda v. Mizo District Council and Another, AIR (1967) SC 829 1966 Indlaw SC 125; Krishnan Kakkanth v. Government of Kerala and Others, AIR (1997 Ratio |
SC 128 1996 Indlaw SC 1845 and Union of India and Another v. International Trading Co. and Another, [2003] 5 SCC 437 2003 Indlaw SC 472 Ratio |
Article 166 of the Constitution deals with the conduct of Government business STA |
The said provision reads as follows: "166 STA |
Conduct of business of the Government of a State,- (1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor STA |
2) Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instr... |
The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocating among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion STA |
Clause (1) requires that all executive action of the State Government shall have to be taken in the name of the Governor Ratio |
Further, is no particular formula of words required for compliance with Article 166(1 Ratio |
What the Court has to see is whether the substance of its requirement has been complied with Ratio |
A Constitution Bench in R. Chitralekha Etc Ratio |
v. State of Mysore and Ors Ratio |
AIR (1964 Ratio |
SC 1823 1964 Indlaw SC 103 held that the provisions of the Article were only directory and not mandatory in character and if they were not complied with it could still be established as a question of fact that the impugned order was issued in fact by the State Government or the Governor Ratio |
Clause (1) does not prescribe how an executive action of the Government is to be performed; it only prescribes the mode under which such act is to be expressed Ratio |
While clause (1) is in relation to the mode of expression, clause (2) lays down the ways in which the order is to be authenticated Ratio |
Whether there is any Government order in terms of Article 166; has to be adjudicated from the factual background of each case Ratio |
In order to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking and doctrine the bald expressions without any supporting material to the effect that the doctrine is attracted because the party invoking the doctrine has altered its pos... |
The Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the Court Ratio |
In Shrijee Sales Corporation and Anr PRE |
v. Union of India, [1997] 3 SCC 398 1996 Indlaw SC 1561 it was observed that once public interest is accepted as the superior equity which can override individual equity the principle would be applicable even in cases where a period has been indicated for operation of the promise PRE |
If there is a supervening public equity, the Government would be allowed to change its stand and has the power to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal PRE |
Moreover, the Government is competent to rescind from the promise even if there is no manifest public interest involved, provided no one is put in any adverse situation which cannot be rectified PRE |
Similar view was expressed in M/s PRE |
Pawan Alloys and Casting Pvt. Ltd PRE |
Meerut Etc PRE |
Etc PRE |
v. U.P. State Electricity Board and Others, AIR (1997 PRE |
SC 3910 1997 Indlaw SC 1364 and in Sales Tax Officers and Anr PRE |
v. Shree Durga Oil Mills and Anr PRE |
1999] 1 SCC 573 1997 Indlaw SC 1219, it was further held that the Government could change its industrial policy if the situation so warranted and merely because the resolution was announced for a particular period, it did not mean that the government could not amend and change the policy under any circumstances PRE |
If the party claiming application of the doctrine acted on the basis of a notification it should have known that such notification was liable to be amended or rescinded at any point of time, if the government felt that it was necessary to do so in public interest PRE |
In view of the factual position recorded by the High Court that at the point of time the appellants' units were set up and the commercial production started there was no assurance or promise Ratio |
The doctrine of promissory estoppel had no application to the facts of the case at that stage Ratio |
We find no substance in the plea that before a policy decision is taken to amend or alter the promise indicated in any particular notification, the beneficiary was to be granted an opportunity of hearing Ratio |
Such a plea is clearly unsustainable Ratio |
While taking policy decision, the government is not required to hear the persons who have been granted the benefit which is sought to be withdrawn Ratio |
The question of legitimate expectation arises according to the appellants after the benefits were granted by the concerned G.O.Ms Ratio |
At this juncture we would like to take note to certain factual positions highlighted by the appellants which are practically undisputed by the respondents Ratio |
Contrary to what the High Court has stated, it appears from record that counter affidavits were filed Ratio |
The reasons which have weighed with the High Court to uphold the action of the State were not pleaded before the High Court specifically, and the High Court cull out those from the files which were produced before it Ratio |
Though the appellants were not entitled to any opportunity of hearing before alteration of the benefits flowing from the notifications or withdrawal of any benefit, yet when the State has not taken any specific stand justifying the withdrawal and the High Court referred to the files to put its seal of proof, notwithsta... |
As noted above no specific grounds or reasons were indicated to justify the withdrawal in the affidavits filed before the Tribunal or the High Court, as the case may be Ratio |
As the correctness of factual basis justifying withdrawal is in issue, fair play certainly warranted grant of opportunity to the appellants to present its side of the picture Ratio |
Further, a definite plea was taken that there was no scope for retrospective withdrawal of benefit by an executive order Ratio |
The High Court has not dealt with the issue Ratio |
The same also needs to be examined Ratio |
Above being the position, decision of the High Court by placing reliance on the files to hold that the withdrawal was justified, is not tenable in law and in the fitness of things, the High Court should hear the matter afresh and taken decision on those two issues Ratio |
It is made clear that we have not expressed any opinion on those issues on the facts of the present case Ratio |
It is to be noted that no privilege was claimed from production of the file as the files were produced before the High Court and in fact the High Court referred to the materials on the files to affirm State's action Ratio |
We direct that the State Government, if it so chooses, shall file its further counter-affidavits before the High Court within six weeks from today indicating the reasons which warranted the withdrawal of the benefits extended Ratio |
The plea of the appellants regarding legitimate expectation shall be considered by the High Court in the light of materials to be placed by the respondents by affidavits as directed above Ratio |
We make it clear that we have not expressed any opinion on the factual aspects except indicating the principles underlying legitimate expectation Ratio |
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