Wednesday, September 22, 2010

SC -Reasons for judgment must – 15 points outlined for reasoning

(Arising out of SLP (Civil) No.20428 of 2007)
M/s. Kranti Associates Pvt. Ltd. & Anr. ..Appellant(s)
Sh. Masood Ahmed Khan & Others ..Respondent(s)
(Arising out of SLP (C) NO.12766 OF 2008)
1. Leave granted.
2. These   two   appeals,   one   at   the   instance   of   the
builder   and   the   other   at   the   instance   of   the
Corporation   Bank,   have   been   filed   impugning   the
Order   of   National   Consumer   Disputes   Redressal
Commission (hereinafter, the said Commission).
13. In the case of the builder, the said Commission has
not   given   any   reason   and   dismissed   the   revision
petition by passing a cryptic order dated 31.8.2007
which reads as under:
In view of the concurrent findings of the
State   Commission,   we   do   not   find   any
force in this revision petition.
The revision Petition is dismissed.”
4. In so far as the case of the builder is concerned,
this   Court   is   of   the   opinion   that   the   said
Commission   cannot,   considering   the   way   it   is
structured,   dismiss   the   revision   petition   by
refusing to give any reasons and by just affirming
the order of the State Commission.
5. The said Commission has been defined under Section
2(k)   of   the   Consumer   Protection   Act,   1986
(hereinafter CP Act) as follows:
“2(k)   “National   Commission”   means   the
National   Consumer   Disputes   Redressal
Commission   established   under   clause   (c)
of Section 9;”
6. Under section 9(c) of CP Act, the said Commission
has been established by the Central Government by a
27. The   composition   of   the   said   Commission   has   been
provided   under   Section   20   of   the   CP   Act   and
wherefrom it is clear that the said Commission is a
high-powered adjudicating forum headed by a sitting
or a retired judge of the Supreme Court.
8. Section   21   of   the   CP   Act   provides   for   the
jurisdiction of the said Commission.
9. In   order   to   appreciate   the   questions   involved   in
this case, the provision relating to jurisdiction of
the said Commission is set out hereunder:
“21.   Jurisdiction   of   the   National
Commission.-   Subject   to   the   other
provisions   of   this   Act,   the   National
Commission shall have jurisdiction-
(a) to entertain-
(i)  complaints   where   the   value
of   the   goods   or   services
and   compensation,   if   any,
claimed exceeds [rupees one
crore]; and
(ii)   appeals   against   the   orders
of   any   State   Commission;
(b) to call for the records and pass
appropriate   orders   in   any   consumer
dispute   which   is   pending   before   or
has   been   decided   by   any   State
Commission   where   it   appears   to   the
National Commission that such State
Commission   has   exercised   a
jurisdiction   not   vested   in   it   by
law,   or   has   failed   to   exercise   a
3jurisdiction so vested, or has acted
in the exercise of its jurisdiction
illegally   or   with   material
10. Under Section 23 of the CP Act, an appeal would lie
against the order of the said Commission passed in
exercise of its powers under Section 21(1)(a), to
this Court, within 30 days, subject to extension of
time by this Court on sufficient cause being shown.
Under   Section   21(1)(b),   the   said   Commission
exercises   revisional   power   over   orders   of   State
11. The   power   and   procedure   applicable   to   the   said
Commission has been provided under Section 22 of the
CP Act. A perusal of Section 22(1) would show that
Sections 12, 13 and 14 of CP Act, with necessary
modification, are applicable to the decision making
process by the said Commission. Under Section 13 of
the CP Act, the District Forum has been vested, in
certain matters, with the powers of a Civil Court
while   trying   a   suit.   Section   13(4)   of   CP   Act   is
applicable to the said Commission in view of Section
22(1)   thereof.   Similarly,   Sections   13(5),   (6)   and
4(7) will also apply to the said Commission in view
of Section 22(1).
12. On a perusal of Sections 13(4), (5), (6) and (7) of
the CP Act, it is clear that the said Commission has
been   vested   with   some   of   the   powers   of   a   Civil
Court. The following powers have been vested on the
said Commission:
“13(4) For the purposes of this section,
the   District   Forum   shall   have   the   same
powers   as   are   vested   in   a   civil   court
under Code of Civil Procedure, 1908 (5 of
1908) while trying a suit in respect of
the following matters, namely:-
(i) the   summoning   and   enforcing
the   attendance   of   any
defendant   or   witness   and
examining   the   witness   on
(ii) the discovery and production
of   any   document   or   other
material object producible as
(iii) the reception of evidence on
(iv) the   requisitioning   of   the
report   of   the   concerned
analysis   or   test   from   the
appropriate   laboratory   or
from   any   other   relevant
(v) issuing of any commission for
the   examination   of   any
witness, and
(vi) any other matter which may be
513. Under Section 13(5) of CP Act, every proceeding of
the said Commission will be deemed to be a judicial
proceeding within the meaning of Sections 193 and
228   of   the   Indian   Penal   Code,   and   the   said
Commission shall be deemed to be a Civil Court for
the purpose of Section 195 and Chapter XXVI of the
Code of Criminal Procedure.
14. The   above   provisions   make   it   clear   that   the   said
Commission has the trappings of a Civil Court and is
a high-powered quasi-judicial forum for deciding lis
between the parties.
15. The   necessity   of   giving   reason   by   a   body   or
authority   in   support   of   its   decision   came   up   for
consideration   before   this   Court   in   several   cases.
Initially   this   Court   recognized   a   sort   of
demarcation between administrative orders and quasi-
judicial   orders   but   with   the   passage   of   time   the
distinction between the two got blurred and thinned
out and virtually reached a vanishing point in the
judgment of this Court in  A.K. Kraipak and others
vs.  Union of India and others reported in AIR 1970
SC 150.
616. In  Kesava Mills Co. Ltd. and another  vs.  Union of
India and others  reported in AIR 1973 SC 389, this
Court approvingly referred to the opinion of Lord
Denning in  Rigina  vs.  Gaming Board Ex parte Benaim
[(1970) 2 WLR 1009] and quoted him as saying “that
heresy was scotched in Ridge and Boldwin, 1964 AC
17. The expression ‘speaking order’ was first coined by
Lord   Chancellor   Earl   Cairns   in   a   rather   strange
context. The Lord Chancellor, while explaining the
ambit of Writ of Certiorari, referred to orders with
errors on the face of the record and pointed out
that an order with errors on its face, is a speaking
order. (See 1878-97 Vol. 4 Appeal Cases 30 at 40 of
the report)
18. This Court always opined that the face of an order
passed   by   a   quasi-judicial   authority   or   even   an
administrative   authority   affecting   the   rights   of
parties,   must   speak.   It   must   not   be   like   the
‘inscrutable face of a Sphinx’. 
719. In the case of Harinagar Sugar Mills Ltd. vs. Shyam
Sunder Jhunjhunwala and others, AIR 1961 SC 1669,
the   question   of   recording   reasons   came   up   for
consideration   in   the   context   of   a   refusal   by
Harinagar   to   transfer,   without   giving   reasons,
shares   held   by   Shyam   Sunder.   Challenging   such
refusal,   the   transferee   moved   the   High   Court
contending,   inter   alia,   that   the   refusal   is   mala
fide,   arbitrary   and   capricious.   The   High   Court
rejected such pleas and the transferee was asked to
file a suit. The transferee filed an appeal to the
Central Government under Section 111 Clause (3) of
Indian   Companies   Act,   1956   which   was   dismissed.
Thereafter, the son of the original transferee filed
another application for transfer of his shares which
was similarly refused by the Company. On appeal, the
Central Government quashed the resolution passed by
the Company and directed the Company to register the
transfer.   However,   in   passing   the   said   order,
Government   did   not   give   any   reason.   The   company
challenged the said decision before this Court.
20. The other question which arose in Harinagar (supra)
was whether the Central Government, in passing the
8appellate order acted as a tribunal and is amenable
to Article 136 jurisdiction of this Court.
21. Even though in  Harinagar  (supra) the decision was
administrative,   this   Court   insisted   on   the
requirement   of   recording   reason   and   further   held
that   in   exercising   appellate   powers,   the   Central
Government   acted   as   a   tribunal   in   exercising
judicial powers of the State and such exercise is
subject to Article 136 jurisdiction of this Court.
Such powers, this Court held, cannot be effectively
exercised if reasons are not given by the Central
Government in support of the order (Para 23, page
22. Again in the case of Bhagat Raja vs. Union of India
and others, AIR 1967 SC 1606, the Constitution Bench
of   this   Court   examined   the   question   whether   the
Central   Government   was   bound   to   pass   a   speaking
order while dismissing a revision and confirming the
order   of   the   State   Government   in   the   context   of
Mines and Minerals (Regulation and Development) Act,
1957, and having regard to the provision of Rule 55
of Mineral and Concessions Rules. The Constitution
9Bench held that in exercising its power of revision
under the aforesaid Rule the Central Government acts
in a quasi-judicial capacity (See para 8 page 1610).
Where the State Government gives a number of reasons
some of which are good and some are not, and the
Central Government merely endorses the order of the
State Government without specifying any reason, this
Court,   exercising   its   jurisdiction   under   Article
136, may find it difficult to ascertain which are
the grounds on which Central Government upheld the
order   of   the   State   Government   (See   para   9   page
1610).   Therefore,   this   Court   insisted   on   reasons
being given for the order.
23. In  M/s. Mahabir Prasad Santosh Kumar  vs.  State of
U.P and others, AIR 1970 SC 1302, while dealing with
U.P.   Sugar   Dealers   License   Order   under   which   the
license was cancelled, this Court held that such an
order of cancellation is quasi-judicial and must be
a speaking one. This Court further held that merely
giving an opportunity of hearing is not enough and
further pointed out where the order is subject to
appeal,   the   necessity   to   record   reason   is   even
greater. The learned Judges held that the recording
10of reasons in support of a decision on a disputed
claim ensures that the decision is not a result of
caprice,   whim   or   fancy   but   was   arrived   at   after
considering the relevant law and that the decision
was just. (See para 7 page 1304).
24. In the case of M/s. Travancore Rayons Ltd.  vs. The
Union   of   India   and   others,   AIR   1971   SC   862,   the
Court, dealing with the revisional jurisdiction of
the Central Government under the then Section 36 of
the Central Excise and Salt Act, 1944, held that the
Central Government was actually exercising judicial
power of the State and in exercising judicial power
reasons in support of the order must be disclosed on
two grounds. The first is that the person aggrieved
gets an opportunity to demonstrate that the reasons
are erroneous and secondly, the obligation to record
reasons   operates   as   a   deterrent   against   possible
arbitrary action by the executive authority invested
with the judicial power (See para 11 page 865-866).
25. In  M/s. Woolcombers of India Ltd.  vs.  Woolcombers
Workers Union and another, AIR 1973 SC 2758, this
Court while considering an award under Section 11 of
11Industrial   Disputes   Act   insisted   on   the   need   of
giving   reasons   in   support   of   conclusions   in   the
Award. The Court held that the very requirement of
giving   reason   is   to   prevent   unfairness   or
arbitrariness   in   reaching   conclusions.   The   second
principle is based on the jurisprudential doctrine
that justice should not only be done, it should also
appear to be done as well. The learned Judges said
that   a   just   but   unreasoned   conclusion   does   not
appear   to   be   just   to   those   who   read   the   same.
Reasoned and just conclusion on the other hand will
also   have   the   appearance   of   justice.   The   third
ground is that such awards are subject to Article
136 jurisdiction of this Court and in the absence of
reasons, it is difficult for this Court to ascertain
whether the decision is right or wrong (See para 5
page 2761).
26. In  Union of India  vs. Mohan Lal Capoor and others,
AIR 1974 SC 87, this Court while dealing with the
question   of   selection   under   Indian   Administrative
Service/Indian   Police   Service   (Appointment   by
Promotion   Regulation)   held   that   the   expression
“reasons for the proposed supersession” should not
12be   mere   rubber   stamp   reasons.   Such   reasons   must
disclose how mind was applied to the subject matter
for a decision regardless of the fact whether such a
decision is purely administrative or quasi-judicial.
This   Court   held   that   the   reasons   in   such   context
would   mean   the   link   between   materials   which   are
considered   and   the   conclusions   which   are   reached.
Reasons must reveal a rational nexus between the two
(See para 28 page 98).
27. In  Siemens   Engineering   and   Manufacturing   Co.   of
India Ltd. vs.  The Union of India and another, AIR
1976 SC 1785, this Court held that it is far too
well settled that an authority in making an order in
exercise of its quasi-judicial function, must record
reasons   in   support   of   the   order   it   makes.   The
learned Judges emphatically said that every quasi-
judicial   order   must   be   supported   by   reasons.   The
rule   requiring   reasons   in   support   of   a   quasi-
judicial   order   is,   this   Court   held,   as   basic   as
following the principles of natural justice. And the
rule must be observed in its proper spirit. A mere
pretence   of   compliance   would   not   satisfy   the
requirement of law (See para 6 page 1789).   
1328. In  Smt. Maneka Gandhi  vs. Union of India and Anr.,
AIR   1978   SC   597,   which   is   a   decision   of   great
jurisprudence   significance   in   our   Constitutional
law,   Chief   Justice   Beg,   in   a   concurring   but
different opinion held that an order impounding a
passport is a quasi-judicial decision (Para 34, page
612).  The learned Chief Justice also held when an
administrative action involving any deprivation of
or restriction on fundamental rights is taken, the
authorities must see that justice is not only done
but   manifestly   appears   to   be   done   as   well.   This
principle   would   obviously   demand   disclosure   of
reasons for the decision.
29. Justice Y.V. Chandrachud (as His Lordship then was)
in   a   concurring   but   a   separate   opinion   also   held
that refusal to disclose reasons for impounding a
passport is an exercise of an exceptional nature and
is to be done very sparingly and only when it is
fully   justified   by   the   exigencies   of   an   uncommon
1430. The   learned   Judge   further   held   that   law   cannot
permit any exercise of power by an executive to keep
the reasons undisclosed if the only motive for doing
so   is   to   keep   the   reasons   away   from   judicial
scrutiny. (See para 39 page 613).
31. In  Rama   Varma   Bharathan   Thampuran  vs.  State   of
Kerala   and   Ors.,   AIR   1979   SC   1918,   Justice   V.R.
Krishna Iyer speaking for a three-Judge Bench held
that the functioning of the Board was quasi-judicial
in   character.   One   of   the   attributes   of   quasi-
judicial functioning is the recording of reasons in
support of decisions taken and the other requirement
is   following   the   principles   of   natural   justice.
Learned   Judge   held   that   natural   justice   requires
reasons to be written for the conclusions made (See
para 14 page 1922).
32. In Gurdial Singh Fijji vs. State of Punjab and Ors.,
(1979) 2 SCC 368, this Court, dealing with a service
matter, relying on the ratio in Capoor (supra), held
that   “rubber-stamp   reason”   is   not   enough   and
virtually quoted the observation in  Capoor  (supra)
to the extent that reasons “are the links between
15the materials on which certain conclusions are based
and the actual conclusions.” (See para 18 page 377).
33. In a Constitution Bench decision of this Court in
Shri Swamiji of Shri Admar Mutt etc. etc.  vs.  The
Commissioner,   Hindu   Religious   and   Charitable
Endowments   Dept.   and   Ors.,   AIR   1980   SC   1,   while
giving   the   majority   judgment     Chief   Justice   Y.V.
Chandrachud referred to Broom’s Legal Maxims (1939
Edition, page 97) where the principle in Latin runs
as follows:
“Ces-sante Ratione Legis Cessat Ipsa Lex”
34. The English version of the said principle given by
the Chief Justice is that:
“Reason is the soul of the law, and when the
reason of any particular law ceases, so does
the law itself.” (See para 29 page 11)
35. In M/s. Bombay Oil Industries Pvt. Ltd. vs. Union of
India and Others, AIR 1984 SC 160, this Court held
that   while   disposing   of   applications   under
Monopolies and Restrictive Trade Practices Act the
duty of the Government is to give reasons for its
order.  This court made it very clear that the faith
16of   the   people   in   administrative   tribunals   can   be
sustained   only   if   the   tribunals   act   fairly   and
dispose   of   the   matters   before   them   by   well
considered orders. In saying so, this Court relied
on   its   previous   decisions   in  Capoor  (supra)   and
Siemens Engineering (supra), discussed above.
36. In  Ram Chander  vs.  Union of India and others, AIR
1986   SC   1173,   this   Court   was   dealing   with   the
appellate   provisions   under   the   Railway   Servants
(Discipline   and   Appeal)   Rules,   1968   condemned   the
mechanical way of dismissal of appeal in the context
of requirement of Rule 22(2) of the aforesaid Rule.
This Court held that the word “consider” occurring
to the Rule 22(2) must mean the Railway Board shall
duly   apply   its   mind   and   give   reasons   for   its
decision. The learned Judges held that the duty to
give reason is an incident of the judicial process
and   emphasized   that   in   discharging   quasi-judicial
functions   the   appellate   authority   must   act   in
accordance with natural justice and give reasons for
its decision (Para 4, page 1176). 
1737. In  M/s.   Star   Enterprises   and   others  vs.  City   and
Industrial   Development   Corporation   of   Maharashtra
Ltd.   and   others,   (1990)   3   SCC   280,   a   three-Judge
Bench of this Court held that in the present day set
up   judicial   review   of   administrative   action   has
become expansive and is becoming wider day by day
and the State has to justify its action in various
field   of   public   law.     All   these   necessitate
recording of reason for executive actions including
the rejection of the highest offer. This Court held
that   disclosure   of   reasons   in   matters   of   such
rejection provides an opportunity for an objective
review both by superior administrative heads and for
judicial process and opined that such reasons should
be   communicated   unless   there   are   specific
justification for not doing so (see Para 10, page
38. In  Maharashtra State Board of Secondary and Higher
Secondary   Education  vs.  K.S.   Gandhi   and   others,
(1991)   2   SCC   716,   this   Court   held   that   even   in
domestic   enquiry   if   the   facts   are   not   in   dispute
non-recording of reason may not be violative of the
principles of natural justice but where facts are
18disputed   necessarily   the   authority   or   the   enquiry
officer,   on   consideration   of   the   materials   on
record,   should   record   reasons   in   support   of   the
conclusion reached (see para 22, pages 738-739)
39. In the case of  M.L. Jaggi  vs.  Mahanagar Telephones
Nigam   Limited   and   others,   (1996)   3   SCC   119,   this
Court dealt with an award under Section 7 of the
Telegraph   Act   and   held   that   since   the   said   award
affects public interest, reasons must be recorded in
the award. It was also held that such reasons are to
be recorded so that it enables the High Court to
exercise   its   power   of   judicial   review   on   the
validity of the award. (see para 8, page 123).
40. In  Charan   Singh  vs.  Healing   Touch   Hospital   and
others,   AIR   2000   SC   3138,   a   three-Judge   Bench   of
this Court, dealing with a grievance under CP Act,
held   that   the   authorities   under   the   Act   exercise
quasi-judicial   powers   for   redressal   of   consumer
disputes and it is, therefore, imperative that such
a   body   should   arrive   at   conclusions   based   on
reasons. This Court held that the said Act, being
one   of   the   benevolent   pieces   of   legislation,   is
19intended to protect a large body of consumers from
exploitation   as   the   said   Act   provides   for   an
alternative mode for consumer justice by the process
of a summary trial.  The powers which are exercised
are definitely quasi-judicial in nature and in such
a situation the conclusions must be based on reasons
and held that requirement of recording reasons is
“too   obvious   to   be   reiterated   and   needs   no
emphasizing”. (See Para 11, page 3141 of the report)
41. Only in cases of Court Martial, this Court struck a
different   note   in   two   of   its   Constitution   Bench
decisions, the first of which was rendered in the
case   of  Som   Datt   Datta  vs.  Union   of   India   and
others,   AIR   1969   SC   414,   Mr.   Justice   Ramaswami
delivering   the   judgment   for   the   unanimous
Constitution Bench held that provisions of Sections
164 and 165 of the Army Act do not require an order
confirming   proceedings   of   Court   Martial   to   be
supported by reasons.  The Court held that an order
confirming such proceedings does not become illegal
if it does not record reasons. (Para 10, page 421-
422 of the report).
2042. About   two   decades   thereafter,   a   similar   question
cropped up before this Court in the case of  S.N.
Mukherjee  vs.  Union of India, AIR 1990 SC 1984. A
unanimous   Constitution   Bench   speaking   through
Justice S.C. Agrawal confirmed its earlier decision
in Som Datt (supra) in para 47 at page 2000 of the
report   and   held   reasons   are   not   required   to   be
recorded   for   an   order   confirming   the   finding   and
sentence recorded by the Court Martial. 
43. It must be remembered in this connection that the
Court   Martial   as   a   proceeding   is  sui   generis  in
nature and the Court of Court Martial is different,
being called a Court of Honour and the proceeding
therein   are   slightly   different   from   other
proceedings.  About the nature of Court Martial and
its   proceedings   the   observations   of   Winthrop   in
Military Law and Precedents  are very pertinent and
are extracted herein below:
“Not belonging to the judicial branch of the
Government,   it   follows   that   courts-martial
must pertain to the executive department; and
they are in fact simply instrumentalities of
the executive power, provided by Congress for
the   President   as   Commander-in-Chief,   to   aid
him in properly commanding the Army and Navy
and enforcing discipline therein, and utilized
under his orders or those of his authorized
military representatives.”
2144. Our   Constitution   also   deals   with   Court   Martial
proceedings   differently   as   is   clear   from   Articles
33, 136(2) and 227(4) of the Constitution.
45. In England there was no common law duty of recording
of   reasons.     In  Marta   Stefan  vs.  General   Medical
Council, (1999) 1 WLR 1293, it has been held, “the
established position of the common law is that there
is no general duty imposed on our decision makers to
record reasons”.   It has been acknowledged in the
Justice Report, Administration Under Law (1971) at
page   23   that   “No   single   factor   has   inhibited   the
development   of   English   administrative   law   as
seriously as the absence of any general obligation
upon public authorities to give reasons for their
46. Even then in the case of R vs. Civil Service Appeal
Board, ex parte Cunningham reported in (1991) 4 All
ER 310, Lord Donaldson, Master of Rolls, opined very
strongly   in   favour   of   disclosing   of   reasons   in   a
case where the Court is acting in its discretion.
The learned Master of Rolls said:
22“..It   is   a   corollary   of   the   discretion
conferred upon the board that it is their duty
to set out their reasoning in sufficient form
to   show   the   principles   on   which   they   have
proceeded.     Adopting   Lord   Lane   CJ’s
observations   (in   R   vs.   Immigration   Appeal
Tribunal, ex p Khan (Mahmud) [1983] 2 All ER
420   at   423,   (1983)   QB   790   at   794-795),   the
reasons for the lower amount is not obvious.
Mr.   Cunningham   is   entitled   to   know,   either
expressly or inferentially stated, what it was
to which the board were addressing their mind
in arriving at their conclusion.   It must be
obvious to the board that Mr. Cunningham is
left with a burning sense of grievance.  They
should   be   sensitive   to   the   fact   that   he   is
left with a real feeling of injustice, that
having   been   found   to   have   been   unfairly
dismissed, he has been deprived of his just
desserts (as he sees them)”.
47. The   learned   Master   of   Rolls   further   clarified   by
“..thus, in the particular circumstances
of this case, and without wishing to establish
any   precedent   whatsoever,   I   am   prepared   to
spell out an obligation on this board to give
succinct reasons, if only to put the mind of
Mr.   Cunningham   at   rest.   I   would   therefore
allow this application.”
48. But, however, the present trend of the law has been
towards   an   increasing   recognition   of   the   duty   of
Court   to   give   reasons   (See  North   Range   Shipping
Limited vs. Seatrans Shipping Corporation, (2002) 1
WLR 2397).  It has been acknowledged that this trend
is consistent with the development towards openness
in Government and judicial administration. 
2349. In  English  vs.  Emery Reimbold and Strick Limited,
(2002) 1 WLR 2409, it has been held that justice
will   not   be   done   if   it   is   not   apparent   to   the
parties why one has won and the other has lost.  The
House of Lords in Cullen vs. Chief Constable of the
Royal Ulster Constabulary, (2003) 1 WLR 1763, Lord
Bingham   of   Cornhill   and   Lord   Steyn,   on   the
requirement of reason held, “First, they impose a
discipline … which may contribute to such decisions
being   considered   with   care.     Secondly,   reasons
encourage   transparency   …   Thirdly,   they   assist   the
Courts in performing their supervisory function if
judicial review proceedings are launched.” (Para 7,
page 1769 of the report)
50. The position in the United States has been indicated
by this Court in S.N. Mukherjee (supra) in paragraph
11 at page 1988 of the judgment. This Court held
that   in   the   United   States   the   Courts   have   always
insisted   on   the   recording   of   reasons   by
administrative   authorities   in   exercise   of   their
powers. It was further held that such recording of
reasons is required as “the Court cannot exercise
their duty of review unless they are advised of the
24considerations underlying the action under review”.
In  S.N. Mukherjee  (supra) this court relied on the
decisions   of   the   U.S.   Court   in  Securities   and
Exchange Commission  vs.  Chenery Corporation, (1942)
87   Law   Ed   626   and  John   T.   Dunlop  vs.  Walter
Bachowski,  (1975) 44 Law Ed 377 in support of its
opinion discussed above.
51. Summarizing the above discussion, this Court holds:
a. In   India   the   judicial   trend   has   always   been   to
record reasons, even in administrative decisions,
if such decisions affect anyone prejudicially.
b. A quasi-judicial authority must record reasons in
support of its conclusions.
c. Insistence   on   recording   of   reasons   is   meant   to
serve the wider principle of justice that justice
must not only be done it must also appear to be
done as well.
d. Recording   of   reasons   also   operates   as   a   valid
restraint   on   any   possible   arbitrary   exercise   of
judicial and quasi-judicial or even administrative
25e. Reasons   reassure   that   discretion   has   been
exercised   by   the   decision   maker   on   relevant
grounds   and   by   disregarding   extraneous
f. Reasons have virtually become as indispensable a
component   of   a   decision   making   process   as
observing   principles   of   natural   justice   by
judicial,   quasi-judicial   and   even   by
administrative bodies.
g. Reasons facilitate the process of judicial review
by superior Courts.
h. The   ongoing   judicial   trend   in   all   countries
committed   to   rule   of   law   and   constitutional
governance   is   in   favour   of   reasoned   decisions
based   on   relevant   facts.   This   is   virtually   the
life blood of judicial decision making justifying
the principle that reason is the soul of justice.
i. Judicial   or   even   quasi-judicial   opinions   these
days   can   be   as   different   as   the   judges   and
authorities who deliver them. All these decisions
serve one common purpose which is to demonstrate
by   reason   that   the   relevant   factors   have   been
objectively   considered.   This   is   important   for
26sustaining   the   litigants’   faith   in   the   justice
delivery system. 
j. Insistence   on   reason   is   a   requirement   for   both
judicial accountability and transparency.
k. If a Judge or a quasi-judicial authority is not
candid   enough   about   his/her   decision   making
process then it is impossible to know whether the
person   deciding   is   faithful   to   the   doctrine   of
precedent or to principles of incrementalism.
l. Reasons   in   support   of   decisions   must   be   cogent,
clear   and   succinct.   A   pretence   of   reasons   or
‘rubber-stamp reasons’ is not to be equated with a
valid decision making process.
m. It cannot be doubted that transparency is the sine
qua non of restraint on abuse of judicial powers.
Transparency in decision making not only makes the
judges   and   decision   makers   less   prone   to   errors
but also makes them subject to broader scrutiny.
(See David Shapiro in Defence of Judicial Candor
(1987) 100 Harward Law Review 731-737).
n. Since the requirement to record reasons emanates
from   the   broad   doctrine   of   fairness   in   decision
making,   the   said   requirement   is   now   virtually   a
component of human rights and was considered part
27of Strasbourg Jurisprudence.   See (1994) 19 EHRR
553,   at   562   para   29   and  Anya  vs.  University   of
Oxford,   2001   EWCA   Civ   405,   wherein   the   Court
referred   to   Article   6   of   European   Convention   of
Human   Rights   which   requires,   “adequate   and
intelligent   reasons   must   be   given   for   judicial
o. In all common law jurisdictions judgments play a
vital   role   in   setting   up   precedents   for   the
future.     Therefore,   for   development   of   law,
requirement of giving reasons for the decision is
of   the   essence   and   is   virtually   a   part   of   “Due
52. For the reasons aforesaid, we set aside the order of
the National Consumer Disputes Redressal Commission
and remand the matter to the said forum for deciding
the matter by passing a reasoned order in the light
of the observations made above. Since some time has
elapsed, this Court requests the forum to decide the
matter   as   early   as   possible,   preferably   within   a
period of six weeks from the date of service of this
order upon it.
2853. In   so   far   as   the   appeal   filed   by   the   Bank   is
concerned,   this   Court   finds   that   the   National
Consumer Disputes Redressal Commission in its order
dated 4th  April 2008 has given some reasons in its
finding. The reasons, inter alia, are as under:
“We   have   gone   through   the   orders   of   the
District   Forum   and   the   State   Commission,
perused   the   record   placed   before   us   and
heard   the   parties   at   length.   The   State
Commission has rightly confirmed the order
of the District Forum after coming to the
conclusion   that   the   Petitioner   and   the
Builder   –   Respondents   No.3   and   4   have
colluded   with   each   other   and   hence,
directed them to compensate the complainant
for the harassment caused to them.”
54. From the order of the State Commission dated 26.7.07
in connection with the appeal filed by the Bank, we
do   not   find   that   the   State   Commission   has
independently   considered   Bank’s   appeal.   The   State
Commission   dismissed   the   Bank’s   appeal   for   the
reasons   given   in   its   order   dated   6.7.07   in
connection with the appeal of the builders.
55. This Court is of the view that since the Bank has
filed a separate appeal, it has a right to be heard
independently in support of its appeal. That right
has   been   denied   by   the   State   Commission.   In   that
view   of   the   matter,   this   Court   quashes   the   order
29dated 26.7.07 passed by the State Commission as also
the order of the National Commission dated 4th April
2008   which   has   affirmed   the   order   of   the   State
56. This case is remanded to the State Commission for
hearing on merits as early as possible, preferably
within   a   period   of   six   weeks   from   the   date   of
service of this order to the State Commission.
57. It is expected that the State Commission will hear
out   the   matter   independently   and   give   adequate
reasons   for   its   conclusions.   We,   however,   do   not
make any observations on the merits of the case.
58. Both   these   appeals   are   allowed.     No   order   as   to
30New Delhi 
September 08, 2010


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