PRINCIPLES OF NATURAL JUSTICE

N.M.Ranka
Senior Advocate
1. Introduction
The principles of natural justice are supposed to be as old as Adam and Eve. When Adam disobeyed
God by eating the forbidden fruit from the tree of knowledge, God did not punish Adam without giving
him an opportunity. It is said, God called him and asked him "Hast thou eaten of the tree where I
commanded thee that thou should not eat?" There are innumerable facets of natural justice. Suffice
to say the law has been developed in the twentieth century by many historical decisions. In ordinary
parlance it means such principles which govern the justice to be done in natural manner or principles
which are adhered to when justice is done by the nature. In statutes, such principles are specifically
provided and even if unprovided, are read into a statute, to save it from the vice of arbitrariness,
unequality, unfairness and bad conscience. Such principles are inherent and back bone of the judicial
system as well as administrative, quasi-judicial or disciplinary action. It is rather the soul of an order
or judgment. Where the statute itself provides for a particular form of opportunity, it has to be strictly
followed, else in a manner well defined by the judgements and the precedents. It is trite, justice not
only should be done, it should appear to have been done, to avoid criticism, doubt and suspicion.
2. Basic principles
It is difficult to precisely define what is meant by natural justice, the contents of principles of natural
justice are quite easy to enumerate. As it stands today, the basic principles of natural justice are : (i)
that the parties should be heard before deciding an issue; (ii) the hearing must be before an impartial
Judge, as no man can be judge of his own cause. Therefore, the hearing must be before an unbiased
Judge; (iii) the Judge should decide in good faith. He should have no bias, personal or pecuniary; and
(iv) the decision given must be reasoned one and therefore, the decision must be evidenced by a
speaking order which enumerates the reasons for coming to a particular conclusion. The American
Due Process of Law postulates : (a) notice (b) opportunity to be heard; (c) an impartial tribunal and
(d) an orderly course of procedure. The concept of speaking order as a part of principles of natural
justice is a significant and important contribution by Indian jurisprudence. The three basic accepted
principles of natural justice are :

that the dispute should be decided by an impartial judge without any bias or interest against
the parties and in the subject-matter of dispute;

audi alteram partem which means, no man should be condemned unheard. Both parties must
be heard before passing any order;

that the decisions must be reasoned one and the orders containing the decision must be
speaking orders.

The essential characteristic of Natural Justice is put by Romans in two maxims, namely, (1) Nemo
judex in causa sua (No man can be judge in his own cause); (2) Audi alteram partem (No man shall
be condemned unheard). This may be put in two words Impartiality and Fairness. The concept of
natural justice is comprised of many colours and shades and many forms and shapes, it is easy to
proclaim, but very difficult to define. No doubt, it is true that the concept of natural justice is not very
clear and, therefore, it is not possible to define it; yet the principles of natural justice are universally
accepted and enforced.
Article 14 of the Constitution of India contains a guarantee of equality before the law to all persons
and a protection to them against discrimination by any law. What Article 14 forbids is discrimination by
law, that is, treating persons similarly circumstanced differently or treating those not similarly
circumstanced in the same way, or, as has been pithily put treating equals as un equals and un
equals as equals. Article 14 prohibits hostile classification by law and is directed against
discriminatory class legislation. Arbitrariness can take many forms and shapes but whatever form or

shape it takes, it is nonetheless discrimination. It also became apparent that to treat a person or a
class of persons unfairly would be an arbitrary act amounting to discrimination for- bidden by Article
14. The Apex Court has recognised that to treat a person in violation of the principles of natural
justice would amount to arbitrary and discriminatory treatment and would violate the guarantee given
by Article 14.
The principles of natural justice have thus come to be recognized as being a part of the guarantee
contained in Article 14 because of the new and dynamic interpretation given by the Supreme Court to
the concept of equality. Violation of a rule of natural justice results in arbitrariness which is the same
as discrimination; where discrimination is the result of State action, it is a violation of Article 14 :
therefore, a violation of a principle of natural justice by a State action is a violation of Article 14.
The two rules of natural justice, namely, nemo judex in causa sua and audi alteram partem, have now
a definite meaning and connotation in law and their content and implications are well understood and
firmly established, they are nonetheless not statutory rules. Each of these rules yields to and changes
with the exigencies of different situations. They do not apply in the same manner to situations which
are not alike. These rules are not cast in a rigid mould nor can they be put in a legal strait-jacket.
They are not immutable but flexible.
These rules can be adapted and modified by statutes and statutory rules and also by the constitution
of the Tribunal which has to decide a particular matter and the rules by which such Tribunal is
governed.
The Honble Supreme Court in Kraipak vs. Union of India AIR 1970 S.C. 150 observed : "the aim of
rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.
These rules can operate only in areas not covered by any law validly made. In other words they do
not supplant the law but supplement it. It is true that if a statutory provisions can be read consistently
with the principles of natural justice, the courts should do so because it must be presumed that the
legislatures and the statutory authorities intend to act in accordance with the principles of natural
justice. But if on the other hand a statutory provision either specifically or by necessary implication
excludes the application of any or all the principles of natural justice then the court cannot ignore the
mandate of the legislature or the statutory authority and read into the concerned provision the
principles of natural justice. Whether the exercise of a power conferred should be made in
accordance with any of the principles of natural justice or not depends upon the express words of the
provision conferring the power, the nature of the power conferred, the purpose for which it is
conferred and the effect of the exercise of that power".
3. Provisions statutory and inherent
Over years, invariably in every statute, provision relating to natural justice, by way of affording an
opportunity of being heard, are inserted to save from arbitrariness. The concept of due process of law
is sought to be brought under the purview of Article 21 of the Constitution of India. Article 10 of the
universal declaration of human rights adopted by the General assembly of United Nations provide
that every one is entitled to full equity to a fair and to the hearing by an independent and impartial
Tribunal in the determination of his rights and obligations and of any criminal charge against him.
Such principles are statutory in many statutes. However, where there is no specific provision, it has to
be implied and such principles being inherent have to be complied with. Such principles have to be
read in, even though not enacted.
The Supreme Court in celebrated case of Maneka Gandhi vs. Union of India, AIR 1978 Supreme
Court 597 observed that although there are no positive words in the Passport Act, 1967 requiring the
applicant to be heard, yet the justice of the common law will supply the omission of the legislature.
The principle of audi alteram partem, which mandates that no one shall be condemned unheard, is
part of the rules of natural justice. Natural justice is a great humanising principle intended to invest
law with fairness and to secure justice and over the year it has grown into a widely pervasive rule
affecting large areas of administrative action. The inquiry must, always be, does fairness in action
demand that an opportunity to be heard should be given to the person affected?

It also observed that law must have been be taken to be well settled that even in a administrative
proceeding, which involves Civil consequences, the doctrine of natural justice must be held to be
applicable. It would not be right to conclude that the audi alteram partem rule is excluded merely
because the power to impound a passport might be frustrated, if prior notice and hearing were to be
given to the person concerned before impounding his passport. A fair opportunity of being heard
following immediately upon the order impounding the passport would satisfy the mandate of natural
justice and a provision requiring giving of such opportunity to the person concerned can and should
be read by implication in the Passports Act, 1967. If such a provision were held to be incorporated in
the Passports Act, 1967 by necessary implication, the procedure prescribed by the Act for
impounding a passport would be right, fair and just and it would not suffer from the vice of
arbitrariness or unreasonableness.
The Supreme Court in Swadeshi Cotton Mills etc. vs. Union of India, AIR 1981 Supreme Court 818
stated: "The general principle as distinguished from an absolute rule of uniform application
seems to be that where a statute does not, in terms, exclude this rule of prior hearing but
contemplates a post decisional hearing amounting to a full review of the original order on merits, then
such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional
stage. Conversely, if the statute conferring the power is silent with regard to the giving of a
predecisional hearing to the person affected and the administrative decision taken by the authority
involves civil consequences of a grave nature, and no full review or appeal on merits be extremely
reluctant to construe such a statute as excluding the duty of affording even a minimal hearing shorn
of all its formal trappings and dilatory features at the predecisional state, unless, viewed
pragmatically, it would paralyse, the administrative process or frustrate the need for utmost
promptitude. In short, this rule of fairplay must not be jettisoned save in every exceptional
circumstances where compulsive necessity so demands. The court must make every effort to salvage
this cardinal rule to the maximum extent possible with situational modifications. But the core of it
must, however, remain, namely that the person affected must have reasonable opportunity of being
hearing and not an empty public relations exercise Provision of Chapter XXC in the Income-tax Act
1961 do not provide an opportunity to be heard to be given before order for purchase as also do not
provide to disclose reasons recorded to effected parties on challenge as to provisions being violative
of Article 14 of the Constitution. The Honble Supreme Court in classic case of C.B. Gautam vs.
Union of India (1993) 199 ITR 530 observed that the requirement of a reasonable opportunity being
given to the concerned parties, particularly, the intending purchaser and the intending seller must be
read into the provisions of Chapter XXC. In our opinion, before an order of compulsory purchase is
made under section 269UD the intending purchaser and the intending seller must be given a
reasonable opportunity of showing case against an order for compulsory purchase being made by the
appropriate authority concerned.
It also observed that if such a requirement were not read into the provisions of the said chapter, they
would be seriously open to challenge on the ground of violation of the provisions of Article 14 on the
ground of non compliance with the principles of natural justice. It stated that requirement of recording
the reasons in writing is no substitute for a provision requiring a reasonable opportunity of being
heard before such an order is made.
The Madras High Court in Vijay Hemant Finance and Estates Ltd. vs. ITO (1999) 238 ITR 282 stated
"Unless the provisions of the statute warrant or there is a necessary implication on reading of the
section that the principles of natural justice are excluded, the provisions of the section should be
construed in a manner incorporating the principles of natural justice. Courts should generally read
into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being
heard before an order is made which could have adverse civil consequences for the parties affected.
It relied on the Supreme Court decision in K. P. Varghese vs. ITO (1981) 131 ITR 597 wherein the
Honble Apex Court observed that the Court can read into the statutory provision a condition which,
though not expressed is implicit as constituting the basic ambition underlying the statutory provision.
The Madras High Court granted an opportunity for rectification for defects in the declaration to make
the provision reasonable and justified and to avoid hardship and unjust result. It also referred to the
decision of Bombay High Court in the case of Dattatriya Gopal Sheety vs. CIT (1984) 150 ITR 464
where the Honble Bombay high Court was pleased to require to give an opportunity to the assessee
to rectify the defects in the application filed for renewal of registration of the firm.

4. Rule of audi alteram partem

Both parties should be heard before any decision. The right to a fair hearing has been used by the
court as the base on which to build a kind of code for administrative procedure comparable with due
process of law. A proper hearing must always include a fair and adequate opportunity to those who
are parties in the controversy for correcting and contradicting anything prejudicial to their view. The
disclosure of a charge or opposing case must be made and it must be made within reasonable time
to allow the person affected to prepare his defence or his comments. He must have fair notice of any
accusation against him. The principle of audi alteram partem has two aspects (i) notice and (ii)
hearing
(i) Notice
Before any action is taken, the affected party should be given a notice to show cause against the
proposed action and seek his explanation. Any order passed without giving notice is against the
principles of natural justice. Accordingly, even if there is no provision in the statute about giving of
notice, if the order in question adversely affects the rights on an individual, the notice must be given.
The notice must be clear, specific and unambiguous and the charges should not be vague and
uncertain. The object of notice is to give an opportunity to the individual concerned, to present his
case. Moreover, the notice must give a reasonable opportunity to comply with the requirements
mentioned thereon. Natural justice, therefore, requires that the person directly affected by the
proposed acts, decisions or proceedings be given adequate notice of what is proposed so that he
may be in a position,

to make representation on his own behalf, or

to appear at the hearing or inquiry (if any), and

effectively to prepare his own case and to answer the case he has to meet.

Accordingly, the notice should be served in sufficient time to enable these representation to be made
effectively. If an oral hearing is to be held, the time and the place must be properly noticed. If the
charges are to be brought, they should be specified with particulars.
(ii) Hearing
The second requirement of audi alteram partem is that the person concerned must be given an
opportunity of being heard before any adverse action is taken against him.
A hearing will normally be an oral hearing. When an oral hearing is given the Tribunal must :

Consider all relevant evidence which a party wishes to submit.

Inform every party of all the evidence to be taken into account, whether derived from another
party or independently.

Allow witnesses to be questioned.

Allow comments on evidence and arguments on the whole case. The right to call and to cross
examine witnesses, as a general rule, is part of natural justice.

Wrongful refusal of an adjournment when reasonably requested, may amount to refusal of fair
hearing.

The parties are entitled to copies of statements recorded at its back, copies of reasons required to be
statutorily recorded, copies of all material which has been collected at the back, is being referred and
relied upon and considered, copies of reports if made as a base for making any addition or allegation
as also copies of third party books, own books, records, details etc.
collected to be used in the matter. The Madhya Pradesh High Court in Keveyam & Co. vs. G. S.
Gaghel (2000) 119 STC 123 observed that failure to furnish report of Flying Squad as failure of
natural justice. It observed that a person against whom adverse order is to be passed has to be given
full opportunity of defending himself or for the purpose of showing cause or explaining the situation as
to why such adverse orders should not be passed against him.
On providing the copies of statements or the reports, the assessee is entitled to seek right of cross
examination. The Supreme Court in State of Kerala vs. K. T. Shaduli Yusuff (1977) 39 Sales Tax
Cases 478 observed "One of the rules which constitutes a part of the principles of natural justice is
the rule of audi alteram partem which requires that no man should be condemned unheard. It is
indeed a requirement of the duty to act fairly, which lies on all judicial authorities, and this duty has
been extended also to the authorities holding administrative enquiries involving civil consequences or
affecting rights of parties. This rule which requires an opportunity to be heard to be given to a person
likely to be affected by a decision is also, like the genus of which it is a specie, not an inflexible rule
having a fixed connotation. It has a variable content depending on the nature of the inquiry, the
framework of the law under which it is held, the constitution of the authority holding the inquiry, the
nature and character of the rights affected and the consequences flowing from the decision. It is,
therefore, not possible to say that in every case the rule of audi alteram partem requires that a
particular specified procedure is to be followed. It may be that in a given case the rule of audi alteram
partem may import a requirement that witnesses whom statements are sought to be relied upon by
the authority holding the inquiry should be permitted to be cross examined by the party affected while
in some other case it may not. The procedure required to be adopted for giving an opportunity to a
person to be heard must necessarily depend on the facts and circumstances of each case. It held
that the usual mode recognised by law for proving a fact is by production of evidence, which includes
oral evidence of witnesses, and that would include equally the right to cross examine witnesses
examined by the authorities. The Supreme Court in Kishan Chand Chellaram vs. CIT (1980) 125 ITR
713 held that the evidence to be used against the assessee must be provide to the assessee and an
opportunity to confront should have been given to an assessee and that the letter could not be used
without providing its copy as also permitting to cross examine the Bank Manager.
Oral hearing
Oral hearing is very much essential, apart from written submissions in response to show cause
notice. Expression "may allow a reasonable opportunity of being heard" includes right for oral
personal hearing. Unless and until, the assessee declines to avail of the right of personal hearing, his
right of oral hearing cannot be stalled.
The Tamil Nadu Taxation Special Tribunal in Vinayaga Spinning Mills vs. CTO (2000) 118 STC 504
while construing the aforesaid expression stated that it costs a duty to give a personal hearing where
asked for, or not." The Andhra Pradesh High Court in Shri Venkataraman Manure Co. vs. Dy.
Commissioner (1978) 42 STC 189 observed that giving personal hearing is not necessarily an
ingredient of the principles of natural justice but it does not mean that no personal hearing should be
given at all. In cases, the assessee asks for personal hearing the authority may give it. The Honble
Court held that the Dy. Commissioner should have given a personal hearing to the assessee even
though the assessee did not asked for it. It drew support from the decisions of the Supreme Court in
Mineral Development Ltd. vs. State of Kerala AIR 1960, Supreme Court 488; Kapoor Singh vs. Union
of India, AIR 1960 Supreme Court 493 and M. P. Industries Ltd. vs. Union of India AIR 1966 Supreme
Court 671 where it has been held by the Supreme Court 671 where it has been held by the Supreme
Court that first, giving personal hearing is not necessarily an ingredient of the principles of natural
justice and secondly, where a personal hearing should be given or not should be decided on the facts
of each case.
The Tamil Nadu Taxation Special Tribunal (Full Bench) in Dy. Commissioner vs. T.V.L. Apshani
Associates (2001) 122 STC 70 observed :

"The words of being heard" would only denote representation either written or oral or both by the
assessee. As per the Oxford Concise Dictionary, the meaning of the word, "heard" is given as "given
audience". Therefore, it is argued that there is no question of not giving personal audience". It is
further argued that the world "hear" and "heard" only means hearing a person either personally or
over phone or through a radio message. Even accepting the above arguments of the learned counsel
for the Revenue, we have to point out that the TNGST Act, 1959, does not recognise a hearing over
the phone or through a radio message.
Further, such a hearing is not known to law. "Hearing" in the legal parlance only means a "personal
audience" or "oral hearing". It referred to the case of Rajam Off-set Printers vs. CTO (1995) 8 MTCR
55 of Madras High Court wherein Honble Mr. Justice Shiv Raj Patil as he was (now Honble Judge of
Supreme Court) has held that wherever the law uses the words "an opportunity of being heard", it has
to be held that a personal hearing should have been given.
The Full Bench of Patna High Court in CWT vs. Sh. Jagdish Prasad Choudary (1995) 211 ITR
observed that legislative intent behind giving reasonable opportunity of hearing means a reasonable
opportunity of oral hearing. It stated "having regard to the development of the principles of natural
justice as well as the dynamic interpretation of Article 14 of the Constitution, it is no longer open to the
authorities to decide the liability of penalty of an assessee merely on the basis of consideration of a
written representation given by the assessee and he must offer the assessee an opportunity of oral
hearing.
The Madhya Pradesh High Court in Acme Fabric Plast Co. vs. ITO (1997) 225 ITR 826 held that even
though the petitioner had taken precautions to file written submissions this was not enough to
assume that oral hearing is not required to be given and this has definitely prejudiced the case of the
petitioner. It also stated that non grant of oral hearing cannot be cured by affording hearing at appeal
stage as held in Ram Chandran vs. Union of India AIR 1986 Supreme Court 1173 at 1182 : "In
principle, there ought to be an observance of natural justice called equally at both stages ....... If
natural justice is violated at the first stage, the right of appeal is not so much a true right of appeal as
a corrected initial hearing, instead of fair trial followed by appeal, the procedure is reduced to unfair
trial followed by fair trial."
Assistance by authorised representative
Section 30 of the Advocates Act 1961 entitled every Advocate whose name is entered in the State
Roll, as of right, to practice throughout the territories of India in all Courts including the Supreme
Court, before any Tribunal or person legally authorised to take evidence and before any other
authority or person before whom such Advocate is or under any law for the time being inforce entitled
to practise. Section 288 (1) of the Income-tax Act provides that any assessee, who is entitled or
required to attend before any Income tax Authority or the Appellate Tribunal in connection with any
proceedings under the Act, otherwise than when required under section 131 to attend personally for
examination on oath or affirmation, may subject to the other provisions of section 288 attend by an
authorised representative. A question arises as to whether a person called upon to appear in person
for recording of statement before any authority, can seek assistance by an Advocate or his authorised
representative? Recording of statements u/s. 131 is a judicial proceeding, similar to that of a Civil
Court under the code of Civil Procedure. Statements so recorded are admissible in evidence, can be
used against him and in case any falsity is noticed the person is liable to prosecution and such
statements may inflict Civil liability as well as may implied in criminal action. There cannot be two
opinions on the issue that when any statement is required to be recorded or one is required to be
cross examined, such person needs an assistance of a technically qualified person, in whom he can
repose confidence, seek strength and in whose company he feels to be safe and peaceful. The
Supreme Court had held in Smt. Nandani Satpathy vs. P. L. Dani AIR 1978 Supreme Court 1025 that
lawyers presence is a constitutional claim in some circumstances in our country also and in the
context of Article 20(3) an assurance of awareness and observance of the right to silence .... We think
that Article 20(3) and Article 22 (1) may in where, be telescoped by making it prudent for the police to
permit the Advocate of the accused, if there one be present at the time he is examined. The Delhi
High Court in the case of K. T. Advani vs. The State New Delhi in 1985 Cr. Law Journal 1325 held
that to deny a suspect the right to consult counsel and to the presence of counsel at the time of
interrogation would be anti thesis of a just, fair and reasonable procedure.

The Bombay High Court in Abdul Rajak Haji Mohd. vs. Union of India (1986) 10 ECC 236 held that
one is entitled to the presence of his Advocate during interrogation u/s 40 of the Foreign Exchange
Regulation Act. However, the Supreme Court in Pool Pandi vs. Supdt. Central Excise (1992) 75
Company cases 504 held that person who is interrogated by the Enforcement Directorate in
investigation or by the Customs Authorities, is not a person accused of an offence within the meaning
of Article 20(3) of the Constitution and is not entitled to the presence or assistance of his lawyer
during the questioning. In the light of the said judgment, an assessee cannot seek assistance of an
Advocate or a Chartered Accountant or an authorised representative at the time of recording of his
statement during survey of search proceedings. However, one is entitled while recording statements
u/s 131 of the Income-tax Act, 1961.
The Bombay High Court in Babu Rao Vishwanath Mathpati vs. State of Maharashtra AIR 1996
Bombay 227 have discussed principles of natural justice extensively. It observed "every person
whose right has been affected must have reasonable notice of the case he has to meet. Furthermore,
he must be furnished with the information upon which the action is based. The opportunity must be
reasonable. What is reasonable however, depends on the facts and circumstances of each case and
lastly, the documents which are necessary for effective exercise of foregoing right should not be
withheld from such person. Moreover, where a party cannot meet the allegations against it for which it
is asked to show cause and cannot properly meet those allegations with reference to the documents
mentioned in the show cause notice it follows that the natural justice requires that the authority must
furnish to the party the copies of those documents. No supply of such documents would obviously
violate the principles of natural justice. Non observance of natural justice is itself prejudice to any man
and proof of prejudice independently of proof of denial of natural justice is unnecessary. It will come
from a person who has denied justice that the person who has been denied justice is not prejudiced.
It held that non supply of documents referred to in the show cause notice is violative of basic
principles of natural justice. It also stated that it is one of the principles of natural justice that the
explanations should be duly considered by the authorities and at least file will disclose as to why said
explanation is not accepted or is not acceptable.
5. Nemo judex in causa sua
The first maxim of natural justice Nemo Judex in Causa Sua is based on three principles, (i) no man
shall be a judge in his own cause, (ii) justice should not only be done but manifestly and undoubtedly
be seen to be done, (iii) judges, like Caesars wife should be above suspicion and, therefore, anything
which lends or may be regarded as tending to cause such a person to decide a case otherwise than
on evidence must be held to be biased. The word Bias has come to mean prejudice, show of favour
or disfavour, antagonism, spite, hostility, prepossession that sways the mind.
The bias which will violate the principles of natural justice may be of three types: (a) pecuniary bias,
(b) personal bias, and (c) official bias or bias as to subject matter. It is well settled that as regard
pecuniary interest, the least pecuniary interest in the subject matter of the litigation will disqualify any
person from acting as a judge. The Supreme Court in Secretary to Government Transport
Department vs. Munuswamy, 1988 (Suppl) SCC 651 (AIR 1988 SC 2232), held that a predisposition
to decide for or against one party without proper regard to the true merits of the dispute is bias.
Personal bias is one of the three major limbs of bias namely pecuniary bias, personal bias and official
bias. A classic case of personal bias was revealed in the decisions of this Court in State of U.P.V.
Mohd. Nooh, 1958 SCR 595 (AIR 1958 SC 86). In the said case, a departmental enquiry was held
against an employee. One of the witnesses against the employee turned hostile. The officer holding
the enquiry then left the enquiry, gave evidence against the employee and thereafter resumed to
complete the enquiry and passed the order of dismissal. The Honble Court quashed the order of
dismissal after holding inter alia that the rules of natural justice were grievously violated.
The Supreme Court in R. L. Sharma vs. Managing Committee AIR 1993 Supreme Court 2155 stated
that if a person has a pecuniary interest, such interest, even if every small, disqualifies such person.
For appreciating a case of personal bias or bias to the subject matter the test is whether there was a
real likelihood of a bias even though such bias has not in fact taken place. The Honble High Court in
Manak Lal vs. Dr. Prem Chand AIR 1957 Supreme Court 425 has laid down that the test is not
whether in act, a bias has affected the judgment, the test always is and must be whether a litigant
could reasonably apprehend that a bias attributable to a member of the Tribunal might have operated

against him in the final decision of the Tribunal. It is in this sense that it is often said that justice must
not only be done but must also appear to be done.
The Supreme Court in International Airport Authority vs. K. D. Bali AIR 1988 Supreme Court 1099
observed "the purity of administration requires that the party to the proceedings should not have
apprehension that the authority is biased and is likely to decide against the party. But it is not every
suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings
is biased. The apprehension must be judged from a healthy, reasonable and average point of view
and not on mere apprehension of any whimsical person.
The Bombay High Court in Babu Rao Vishwanath Mathpati vs. State of Maharashtra AIR 1996
Bombay 227 stated fairness must be observed even in the circumstances where natural justice is
inapplicable. The object of fairness or fair play is to ensure that the vast power in the modern State is
not for improper purpose or misguided by extraneous or irrelevant considerations and that the
statutory authority arrives at a just or reasonable decision in affecting the rights of the person.
The Supreme Court in Ashok Kumar Yadav vs. State of Haryana AIR 1987 SC 454 observed "It is
one of the fundamental principles of our jurisprudence that no man can be a judge in his own cause
and that if there is a reasonable likelihood of bias it is in accordance with natural justice and
commonsense that the justice likely to be so biased should be incapacitated from sitting. The
question is not whether the judge is actually biased or in fact decides partially, but whether there is
real likelihood of bias. What is objectionable in such a case is not that the decision is actually tainted
with bias but that the Circumstances are such as to create a reasonable apprehension in the mind of
others that there is a likelihood of bias affecting the decision. The basic principle underlying this rule
is that justice must not only be done but must also appear to be done. It is also important to note that
this rule is not confined to cases where judicial power stricto sensu is exercised. It is appropriately
extended to all cases where an independent mind has to be applied to arrive at a fair and just
decision between the rival claims of parties. Justice is not the function of the courts alone, it is also
the duty of all those who are expected to decide fairly between contending parties. The strict
standards applied to authorities exercising judicial power are being increasingly applied to
administrative bodies of it is vital to the maintenance of the rule of law in a welfare state where the
jurisdiction of administrative bodies is increasing at a rapid pace that the instrumentalities of the state
should discharge their functions in a fair and just manner.
6. Speaking and reasoned order
An order should be speaking, should contain detailed recording of evidence for and against,
explanation of both sides, arguments raised by both sides and the reasons for arriving at a particular
view. A reasoned and speaking order is bedrock of justice whether or not an appeal or revision lies
against it. The Supreme Court in the Siemens Engineering & Manufacturing Co. vs. UOI AIR 1976
SC 1785 stated: "It is now well settled law that where an authority makes an order in exercise of a
quasi judicial function, it must record its reasons in support of the order it makes and the order must
be supported by reasons. The Supreme Court in S. N. Mukherjee vs. UOI AIR 1990 Supreme Court
in 1984 observed: "The recording of reasons by an administrative authority serves a salutary
purpose, namely it excludes chances of arbitrariness and assures a degree of fairness in the process
of decision making. The said purpose would apply equally to all decisions and its application cannot
be confined to decisions which are subject to appeal, revision or judicial review. Therefore, the
requirement that reasons be recorded should govern the decisions of an administrative authority
exercising quasi judicial functions irrespective of the fact whether the decision is subject to appeal,
revision or judicial review. It is however not required that the reasons should be as elaborate as in the
decision of a Court of law, the extent and nature of the reasons would depend on particular facts and
circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the
authority has given due consideration to the points in controversy.
The need for recording of reasons is greater in a case where the order is passed at the original state,
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 Supreme Court in State of West Bengal vs. Atul Krishna Shaw, 1990 SC 2205 stated "giving of
reasons is an essential element of administration of justice. A right to reason is, therefore, an

indispensable part of sound system of judicial review. Reasoned decision is not only for the purpose
of showing that the citizen is receiving justice but also a valid discipline for the Tribunal itself.
Therefore, statement of reasons is one of the essentials of justice."
It stated that the order should be a speaking order. The Supreme Court in Kishan Lal vs. UOI
observed that even though in section 220(2A) of the IT Act it is not stated that any reasons are to be
recorded in the order deciding such an application, it is implicit in the said provision that whenever
such an application is filed the same should be decided by a speaking order. The principles of natural
justice in this regard would be clearly applicable. A decision which is taken by the authority under
section 220 (2A) can be subjected to judicial review, by filing a petition under Article 226 of the
Constitution. This being so and where the decision of the application may have repercussion with
regard to the amount of interest which an assessee is required to pay, it would be imperative that
some reasons are given by the authority while disposing of the application. The matter was restored
to the file of the Chief Commissioner to decide in accordance with law.
7. Violation of principles
Any order made in violation of principles of natural justice is void ab-initio and is liable to be annulled
and cancelled. The Supreme Court in Nawabkhan Abbaskhan vs. State of Gujarat AIR 1974 SC 1471
held that an order which infringes a fundamental freedom passed in violation of the audi alteram
partem
rule
is
a
nullity.
When
a
competent
court holds such official act or order invalid or sets it aside, it operates from nativity, i.e. the impugned
act or order was never valid.
Where any proceedings are lawfully initiated and the authority has jurisdiction and validly initiate
certain proceedings, if any illegality on account of violation of principles of natural justice is
committed, the matter deserves to be restored to that initial stage, where the illegality was
supervened as held by the Supreme Court in Guduthur Brothers vs. ITO (1960) 40 ITR 298. In the
said case the Honble Supreme Court held that the show cause why penalty should not be imposed
did not seize to be operative and proceedings can continue from the stage that which the illegality
has occurred.
Reliance can also be placed in this connection upon the judgment of the Supreme Court in the case
of CIT vs. Electro House (1971) 82 ITR 824. The Bombay High Court in CIT vs. Bharat Kumar Modi
(2000) 164 CTR 273 observed that an irregularity in the exercise of jurisdiction cannot result in
annulment of the entire assessment proceedings. There is no case of lack of jurisdiction. It also
observed that lack of opportunity to the assessee is an irregularity which affects the legality of the
order but is does not affect jurisdiction and hence the Appellate authority was right in only setting
aside and remanding the matter back with specific directions. The order need not be annulled.
The Honble Supreme Court in Supdt. of Excise vs. Pratap Rai (1978) 114 STR 231 and CIT vs.
National Taj Traders (1979) 121 ITR 535 held that the order passed in violation of natural justice,
though void, it does not affect the jurisdiction otherwise vest in such authority and in exercise of such
authority it can pass fresh orders. The Honble Court also held that the limitation to pass would be
applicable only by passing the original order and not by passing afresh order in pursuance of the
order setting aside the original order. Same view have been expressed by the Supreme Court in
Kapoor Chand vs. CIT (1981) 131 ITR 451.
8. Conclusion
Principles of natural justice are soul of an administration of justice and need to be adhered to in order
to make the order as a just and fair order. Above stated principles are well settled and need to be
complied by all Courts, authorities and Tribunals while dispensation of justice. It is a duty and
obligation and its violation is infringement of fundamental rights conferred by the Constitution of India
and shall also make mockery of law, which is impermissible in democracy.