Post Decisional Hearing: Development through Judicial Pronouncement and case study of Canara Bank v. V.K.Awasthi, 2005 (6) SCC 231

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Author : hitesh050991
Published on : October 27, 2011


  
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I am Hitesh Agrawal pursuing 5 year B.A.LL.B.(Hons.) programme from Nirma University, Ahmedabad, Gujarat.

Post Decisional Hearing:
Development through Judicial Pronouncement
&
 case study of Canara Bank v. V.K.Awasthi, 2005 (6) SCC 231

Post decisional hearing is a hearing which takes place after a provisional decision is reached. This principle was laid down in Maneka Gandhi v. Union of India. There is a nexus between pre-decisional and post-decisional hearing. The logic behind introducing the post- decisional hearing is to increase and maintain administrative fairness.

Post decisional hearing takes place where it may not be feasible to hold pre decisional hearing. One better example is, the power to impound the passport may be frustrated if a prior notice or hearing has given to the concerned person whose passport is going to be impounded because he can leave the country, therefore, passport authorities first impound the passport of that person without any hearing and later provide him opportunity of hearing. This was the scenario of Maneka Gandhi v. Union of India in which J. Chandrachud held that the action of impounding passport without giving her pre decisional hearing was bad. It was an exceptional site because government was not justified in its act of impounding passport. Later on, the concept was made justified in such cases.

The rule of Audi Alteram Partem is excluded from the purview of post decisional hearing or I can say that it is an exception of post decisional hearing but as soon as order is made, a fair opportunity of being heard should be provided to the person in order to follow the above said rule. This post decisional hearing cannot be treated as substitute of pre decisional hearing, the reason being that for the aggrieved person, pre decisional hearing affords such better safeguards.

It depends upon facts and circumstances of the case and there have been many instances where court have permitted a post decisional hearing as pre decisional hearing did not appear to be feasible, and where courts have refused to accept post decisional hearing where pre decisional hearing could have been given.

A post decisional hearing is less effective than a pre decisional hearing and it has pointed out by the court itself that once a decision has been taken by an authority, its natural tendency would be to support the same or not obviate from former order and representation against it may not really prove any fruitful result. Post decisional hearing is not adequate in dismissal case where the consequence to the concerned person is very serious.

In one case, certain banks were amalgamated with nationalized banks. As a result of this, certain employees of the bank which were amalgamated were excluded and their services were not taken over by the transferee bank. Such exclusion was made without giving any hearing to the affected employees. The action was challenged by some of these employees. The Supreme Court held that these employees must have been given a hearing before they were excluded. The Supreme Court refused to agree with the view that a post decisional hearing would be adequate in the situation. In this case, there was no reason that, why they did not conduct a pre decisional hearing, therefore, a clear cut case of infringement of natural justice came before the court.

Before making a notification to declare an organization as a terrorist organization, there is no provision for pre decisional hearing. But this cannot be considered as a violation of principle of Audi Alteram Partem because in the peculiar background of terrorism, it may be necessary for the central government to declare an organization as terrorist organization even without hearing such organization. Under section 19 of the Prevention of Terrorism Act, 2002 (POTA) the aggrieved party can approach the central government itself for reviewing its decision. The post decisional remedy provided under POTA, 2002 satisfies the Audi Alteram Partem requirements in the matter of declaring an organization as a terrorist organization. Therefore, the absence of pre decisional hearing cannot be treated as a ground for declaring Section 18 of POTA, 2002 as invalid.

Whenever opportunity for pre decisional hearing is not provided and interim orders are passed by the court in a case, then in such cases, there is always scope of post decisional hearing in order to justify natural justice. If there is any ex-parte order passed by the court then aggrieved party can always make its representation before the court before the final decision.

Justice O Chinappa Reddy in a case gave dissenting view from other judges that:
“Where an express provision in the statute itself provides for a post decisional hearing the other provisions of the statute will have to be read in the light of such provision and the provision for post decisional hearing may then clinch the issue where pre decisional natural justice appears to be excluded on the other terms of the statute”.

In Swadeshi Cotton Mills v. Union of India, an order taking over the management of a company by the government without prior notice or hearing was held to be bad and contrary to law. Court held, “the facts and circumstances of the instant case, there has been a non-compliance with such implied requirement of the Audi Alteram Partem rule of natural justice at the pre decisional stage. The impugned order, therefore, could be struck down.

As a general rule, thus, Audi Alteram Partem should be followed by affording pre decisional hearing.

In Olga Tellis case, statute empowered the commissioner to remove the construction without notice but Supreme Court read the Audi Alteram Partem rule “as containing command not to issue notice before the removal of construction is encroachment, make the law invalid”.

However, it makes principle of natural justice violated and therefore, invalid.

An opportunity of pre decisional hearing was not provided by the Bombay Municipal Corpn. And such law passed by the legislature i.e. power to remove construction without notice is violation of rule of natural justice because injustice would have done with plaintiff before he could say anything in his defense. In order to maintain principle of natural justice, Supreme Court gave correct verdict.

To what extent hearing at appellate stage valid:
In Leary v. National Union of Vehicle Builders, an order of expulsion of a member was passed without observing principle of natural justice. On this Megarry J. said: “As a general rule, at all events, I hold that a failure to natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body.”

Initially, importance was given to the pre decisional hearing and judges held that if proper opportunity is not provided to the party to the suit, it will affect that party and its defect cannot be removed at appellate stage because it would have affected that party to an extent. But as the time passed, changes emerged and in Calvin v. Carr. Court held that such type of hearing i.e. at the appellate stage is sufficient and India is also following this principle.

In State of U.P. v Mohd. Nooh, Supreme Court held that if an order passed by an inferior court or tribunal of first instance is null and void cannot be obliterated or cured on appeal or revision. Even if such an order is confirmed in appeal or revision, it does not make any difference.

In Institute of Chartered Accountants of India v. L.K.Ratna, the contention raised that even if the hearing has not given at the initial stage, a right on appeal has been conferred on such member and the member can avail himself on such an opportunity of being heard at the appellate stage But the Supreme Court Observed that “there are cases where injury is caused as soon as it is made and that injury is not capable of being entirely erased when the error is corrected on subsequent appeal.”

Thus, there is need to ensure that there is no breach of fundamental procedure in the original proceedings.

In the recent case of Rasila S. Mehta v. Custodian, Nariman Bhavan, Mumbai, Supreme Court held- “Section 3(2) does not give any right of personal hearing to the person being notified. In the absence of any such right there is no pre-decisional hearing, the provisions of the Act do not provide for a pre-decisional hearing before notification but contains an impeccable milieu for a fair and just post decisional hearing. The fact that it does not provide for a pre-decisional hearing is not contrary to the Rules of Natural Justice.”

In this case, merely there was no provision for pre decisional hearing does not lead to the inference of the violation of the principle of natural justice. Court provided for sufficient post decisional hearing opportunity in order to follow principle of Audi Alteram Partem.

In K.K.Baskaran v. State, the Apex Court held: “Under Section 3 & 4 of the Tamil Nadu Act, certain properties can be attached, and there is also provision for interim orders for attachment after which a post decisional hearing is provided for. In our opinion this is valid in view of the prevailing realities.”

Now, I can say that hearing at the appellate stage is valid only when pre decisional hearing is not possible after considering the nature of the case and prevailing circumstances but if it is possible to conduct pre decisional hearing then opportunity should be provided to the party to present his defense for doing justice. Post decisional hearing is also valid when the harm caused due to lack of opportunity to defend at preliminary stage can compensated at post decisional shearing stage.

Application:
Whenever pre decisional hearing is not feasible or not possible or cannot be conducted due to nature of the case, post decisional hearing can be provided. If an area is devastated by flood, one cannot wait to issue show cause notices for taking out of the vehicles in order to rescue people. If there is any emergency or any epidemic, presumption lies that one may not have to issue show cause notices to requisite beds in hospitals, public or private. In such situations, it is enough to issue post decisional notices providing for an opportunity. Even there may be such instances where it is not necessary to issue notices of post decisional hearing but it is obligatory on the opposite party because if aggrieved party wants to represent itself, then a fair opportunity should be given to it. This would fulfill the requirements of principle of natural justice.

A case study of Canara Bank v. V.K.Awasthi:
History:
It is an appeal from the Judgment and Order dated 20.1.2004 of the Kerala High Court in W.A. No. 589 of 2000 and appellant is challenging in this Appeal as to correctness of the judgment rendered by a Division Bench of the Kerala High Court. It was held that the order was passed without proper application of mind regarding the findings recorded by the Disciplinary Authority on the basis of report of the enquiry officer, and relating to imposition of punishment. Therefore, High Court permitted the respondent - writ petitioner to make a detailed representation to the Disciplinary Authority in respect of the enquiry proceedings and findings, which have to be done within a stipulated time and directions were given to the Disciplinary Authority to consider the submission and pass a fresh order. High Court also directed that the period during which respondent was out of service was to be treated as period under suspension.

Facts:
A show cause notice was issued on 2.7.1992 to the respondent in present appeal. Since the respondent was not working at the Branch where he was originally posted and was living at Kanpur, the notice was served on him on 6.8.1992 and 15 days' time was granted for the purpose of filing response and his termination order was passed on 17.8.1992. Kerala High Court held that respondent's dismissal from service was in violation of the principles of natural justice and appeal went to the Supreme Court.

Issue:
1. Whether dismissal of the respondent employee from the service was valid or not.

Judgment:
It was held by the Supreme Court that the quantum of punishment i.e. dismissal from service was disproportionate to the misconduct proved. It was however, held that no prejudice was caused to the writ petitioner and there was no violation of principles of natural justice and the order of dismissal as passed by the Appellant-Bank does not suffer from any infirmity. Appeal is accordingly allowed, but with no order as to costs.

Critical Analysis of the case:
One and the foremost important thing was that the respondent-employee did not take any stand that there was any prejudice caused to him on account of the fact that the order was passed prior to the expiry of the indicated period. Notice was served on 6 August and on 17 August his termination order was passed. He was even given personal hearing by the Appellate Authority and their also, no such stand was taken and no plea regarding any prejudice was raised. If the party, who has to exercise over his right is sleeping, then no one can help them. The learned single judge was right in holding that there was no prejudiced caused to respondent- employee.

Respondent said, Merely because no specific ground regarding prejudice was taken either in the Memorandum of Appeal or at the time of personal hearing that does not cure the fatal defect of violation of principles of natural justice but one has to show the ground, the rationale behind his words. There was no material placed by the respondent counsel regarding prejudice done with him.

Often, post-decisional hearing cannot be a substitute for pre-decisional hearing but in the present case, position is bit different as illustrated by the case of Managing Director, ECIL, Hyderabad and Ors. v. B. Karunakara and Ors.Which reads as follows:

“The question whether the employee would be entitled to the back-wages and other benefits from the date of his dismissal to the date of his reinstatement if ultimately ordered, should invariably be left to be decided by the authority concerned according to law, after the culmination of the proceedings and depending on the final outcome. If the employee succeeds in the fresh inquiry and is directed to be reinstated, the authority should be at liberty to decide according to law how it will treat the period from the date of dismissal till the reinstatement and to what benefits, if any and the extent of the benefits, he will be entitled. The reinstatement made as a result of the setting aside of the inquiry for failure to furnish the report, should be treated as a reinstatement for the purpose of holding the fresh inquiry from the stage of furnishing the report and no more, where such fresh inquiry is held. That will also be the correct position in law."

However, in such dismissal cases of employees, the related aspects have to be decided according to the law and not by facts.

As there was opportunity to meet the stand of the Bank and opportunity for personal hearing was also granted, the crucial question that remains to be adjudicated is whether principles of natural justice have been violated; and if so, to what extent any prejudice has been caused. Natural justice is synonym of commonsense justice.

The adherence to principles of natural justice is prima facie important when a quasi-judicial body works on determining disputes between the parties, or any administrative action involving civil consequences is in issue. The most important principle is commonly known as Audi Alteram Partem rule. It says that no one should be condemned unheard."

Overall, Respondent was given reasonable opportunity to be heard even when he appeared for personal hearing before appellate authority but he did not disclose the fact of ‘passing of termination or dismissal order before expiry of prescribed period’.

In Spackman v.Plumstead District Board of Works , Noble Lord Chancellor observed:
What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the frame-work of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice.

Usually, whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon. All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated.

In most celebrated case, Waynesburg case it was held that when a statute gave discretion to an administrator to take a decision, the scope of judicial review would remain limited. He said that interference was not permissible unless one or the other of the following conditions was satisfied, namely the order was contrary to law, or relevant factors were not considered, or irrelevant factors were considered; or the decision was one which no reasonable person could have taken. These principles were consistently followed in the UK and in India to judge the validity of administrative action.

From this case, it can be seen that all the relevant facts were not considered at the instance of respondent and it was mistake on his part which in no way can be considered as violation of natural justice.

In Charan Lal Sahu v.Union of India Court held that ‘post-decisional hearing can obliterate the procedural deficiency of a pre-decisional hearing’. Therefore, if there is any lack in the proceedings of any case, then it can be resolved by using post- decisional hearing.

After considering the Rasila S. Mehta and K.K. Bhaskaran’s case, it can be said that it depends upon the prevailing facts and circumstances of case that whether post decisional hearing can cure the defect of pre decisional hearing.

Conclusion:
In the end, I would like to conclude that its application depends upon the nature of the case. Post decisional hearing can be applied in the cases, where an opportunity of pre decisional hearing cannot be provided to the party in. In Swadeshi Cotton Mills v. Union of India, the crux was ‘post decisional hearing is not an adequate substitute for pre decisional hearing’ and in Canara bank v. Debasis Das held ‘although post decisional hearing is not accepted as an adequate substitute for pre decisional hearing, in the absence of prejudice to the party pre decisional deficiency can be compensated by post decisional hearing. In such a case, it has been held that there was no violation of principle of natural justice.’

These both cases show that the ‘Doctrine of post decisional hearing’ is accepted as working. It has to be applied whenever it is necessary and considering nature of the case. In application of this doctrine, the motive of the court is to do justice with the parties to the suit. No party should suffer any sort of loss due to it.

In the present case, the respondent employee had the opportunity of raising the question about passing of dismissal order before the prescribed period but he did not raise it and the decision of the court, due to it, sets on the right path. One cannot say that the court was arbitrary in performing its business. It was mistake on the part of the respondent and it was committed even when he was given an opportunity of personal hearing.

Now, what can one person expect from this particular person!!

References:
# Takwani, C.K, Lectures on Administrative Law, ed. 4th, Eastern Book Company, Lucknow
# Sathe, S.P, Administrative Law, Ed. 7th, Lexis Nexis Butterworths Wadhwa, Nagpur
# Jain M.P. and Jain S.N., Principles of Administrative Law, Ed. 2007, Wadhwa, Nagpur.
# Hitesh Agrawal, 3rd Year, Institute of Law, Nirma University, Ahmedabad
# AIR 1978 SC 597: (1978) 1 SCC 248
# Ibid
# I.J.Rao v. Bibhuti Bhisham Bagh, AIR 1988 SC 1885
# K.I.Shepard v. Union of India, AIR 1988 SC 686
# PUCL v. Union of India, (2004) 9 SCC 580: AIR 2004 SC 456
# AIR 1981 SC 818
# OlgaTellis v. Bombay Municipal Corpn. (1985) 3 SCC 545 (581): AIR 1986 SC 180 (199)
# (1970) 2 AII ER 713 (720): 1971 Ch D 34 (39)
# 1980 AC 574
# AIR 1958 SC 86
# (1986) 4 SCC 537 (553-54): AIR 1987 SC 71 (78)
# Decided on 6th May, 2011
# Decided on 4th March, 2011
# 2005 (6) SCC 231
# (1994)ILLJ162SC
# 1985 (10) AC 229:54 LJMC 81
# 1948 (1) KB 223
# AIR1990SC1480
# Ibid, , no. 7
# (2003) 4 SCC 557

Authors contact info - articles The  author can be reached at: hitesh050991@legalserviceindia.com