Allowed

M/S Sree Srinivasa Stone Crusher v. the State of Ap

Andhra Pradesh HC16 Dec 2020WP/22964/2020

Case brief

AI extract

What is this about?

The High Court allowed a writ petition challenging a revisional order dismissing a revision against seigniorage fee demands. The Court held that the authority failed to record reasons and consider evidence, violating natural justice. The order was remanded to pass a reasoned decision.

What did the court decide?

The impugned revisional order set aside; matter remitted to respondent No.3 to pass a reasoned order after considering grounds of revision.

M/S Sree Srinivasa Stone Crusher Vs the… — Mining and Natural Resources | Andhra Pradesh HC (2020)

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HON’BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI WRIT PETITION No.22964 of 2020

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ORDER:

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The Writ Petition is filed challenging the impugned memo dated 02.11.2020, issued by respondent No.3, dismissing the revision petition filed by the petitioner against the demand notice dated 15.11.2018, issued by respondent No.4, levying Rs.3,77,986/- towards normal seigniorage fee and penalty of Rs.50,96,692/-, totalling to Rs.54,74, 678/-.

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Petitioner, a stone crusher unit, claims to have been carrying on its operations in accordance with the rules contemplated under the Andhra Pradesh Minor Mineral Concession Rules, 1996 (for short ‘the Rules’); during payment of bills to the contractors, seigniorage fee was deducted; accordingly, after deduction of applicable seiginiorage fee, the bills were released for the works executed; while so, on 21.07.2018, the officials of Regional Vigilance and Enforcement Officer, Tirupathi, inspected their Unit, took measurements of road metal stock available at the crusher premises and arrived at 5,039.89 CBM of road metal aggregates and directed respondent No.4 to collect normal seigniorage fee along with penalty; accordingly, respondent No.4 issued demand notice levying Rs.3,77,986/-, towards normal seigniorage fee, and penalty of Rs.50,96,692/-, totalling to Rs.54,74,678/-; against which, a revision was filed; and, by the order under revision, respondent No.3

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dismissed the revision and directed to collect the demanded amount. Hence the Writ Petition.

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Smt S.Pranathi, learned counsel for the petitioner, submits that, though the petitioner filed revision, along with details of seigniorage charges for the metal deducted from the work bills, the order under revision was passed without considering the said material and that no reasons are assigned while dismissing the revision petition. She, therefore, seeks to remand the matter for consideration afresh. In support of her contention, she relied upon the decision of the Constitution Bench of the Hon’ble Supreme

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Court in ‘ S.N.Mukherji vs. Union of India¹ ’.

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Learned Government Pleader for Mines and Geology on the other hand, submits that, pursuant to the demand notice, no explanation has been given by the petitioner; hence, the remarks of the Director of Mines and Geology were called for; and, based on the said remarks, the revision petition was disposed of.

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As seen from the revisional order, at paragraph 2, the grounds of revision are extracted. Paragraph 3 states that the remarks of the Director of Mines and Geology, Ibrahimpatnam has been called for on the grounds of Revision.

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Paragraphs 4 to 7 of the revisional order read thus:

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“4. In the reference 3^rd cited, the ADM&G, Vigilance, Tiruapthi has submitted his remarks to Government stating that the Regional Vigilance and Enforcement Officials were inspected the Petitioner’s

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1 1990(4) SCC 594

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Crusher Unit and noticed the stock at the Crusher site. They raised the demand and referred the case to their office for realisation. The petitioner neither submitted the recorded evidence to the Regional Vigilance and Enforcement Officials nor to the Department of Mines & Geology. The Assistant Director of Mines and Geology, Vigilance, Tirupathi has, therefore, requested the revisional authority to dismiss the revision filed by the petitioner.

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In order to dispose off the Revisional Application, a personal hearing was conducted on 24.06.2020 duly giving reasonable opportunity for personal hearing to the revision petitioner.

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After hearing the arguments on both sides, the Revisional authority dismissed the revision application of M/s.Sree Sreenivasa Stone Crusher, Prop:Sri Y.Sreedhar Naidu and directed the department to collect the demanded amount and also directed to determine the quarry lease held by him in Sy.No.1481 of Dornakambala Village, Chandragiri Mandal, Chittoor District.

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Accordingly, the Revision Application is disposed off under Rule 35-A of Andhra Pradesh Minor Mineral Concession Rules, 1966 and the Director of Mines and Geology, Government of Andhra Pradesh, Ibrahimpatnam shall take further necessary action in the matter.”

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As seen from the above paragraphs, there is no discussion with regard to grounds raised by the petitioner in the revision petition, and no reasons are given in support of the order under revision.

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In S.N. Mukherjee’ s case (1 supra), the Constitution Bench of the Hon’ble Supreme Court, at paras 38 and 39 held as follows:

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“38. The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fair play in action." As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decisionmaking. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the

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requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework where under jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that affect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would out-weight the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case.

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For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision.”

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Under Rule 35-A of the Rules, requirement of giving reasons is not expressly or by necessary implication dispensed with.

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In ‘C entral Public Information Officer, Supreme Court of

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India vs. Subhash Chandra Agarwal² ’, while relying upon the S.N. Mukherjee ’s case (1 supra), Constitution Bench of the Hon’ble Supreme Court held that ‘the requirement to record reasons is a principle of natural justice and a check against the arbitrary exercise of power by judicial and quasi-judicial bodies.’

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In ‘ Kranti Associates Pvt. Ltd. Vs Masood Ahemd Khan³ ’,

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the Hon’ble Supreme Court held as follows:

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“51….Summarizing the above discussion, this Court holds:

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(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

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(b) A quasi-judicial authority must record reasons in support of its conclusions.

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(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.

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(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

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(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.

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(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.

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(g) Reasons facilitate the process of judicial review by superior courts.

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(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 lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.

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2 2019(16) SCALE 40

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3 (2010) 9 SCC 496

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(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 sustaining the litigants faith in the justice delivery system.

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(j) Insistence on reason is a requirement for both judicial accountability and transparency.

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(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.

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(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.

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(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 Harv L. Rev. 731-37.)

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(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decisionmaking, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553], EHRR at p. 562, para 29 and Anya v. University of Oxford 2001 EWCA Civ 405, wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, 'adequate and intelligent reasons must be given for judicial decisions'.

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(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 process'."

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This Court in ‘ Kalari Nagabhushana Rao vs. the

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Collector, Panchayat Wing, Guntur⁴ ’, held as follows:

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“The very practice of calling for reports or para-wise remakes on the appeal memorandum by the statutory quasi-judicial appellate tribunal or authority unless specifically provided for in the statute or the rules framed thereunder, must be deprecated. Such a procedure is not

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4 AIR 1978 AP 444 = 1987(2) ALT 217

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only unjust and improper but would also prejudice to a great extent the case of the very person who had come to the appellate tribunal with a definite case that what has been done by the original authority was illegal incorrect and unjust. Such a practice may be there fore a number of years but it must be put an end to. The earlier such practices are given up, the better for the concerned parties and people at large. Proper and independent exercise of powers and functions by a statutory quasi-judicial appellate authority or tribunal is essential and necessary for the administration of justice.”

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Following the law laid down by the Hon’ble Supreme Court in the above referred judgments, the impugned order under revision is set aside and the matter is remitted back to respondent No.3 to pass a reasoned order after considering the grounds of revision.

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Accordingly, the Writ Petition is allowed. There shall be no order as to costs.

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Consequently, Miscellaneous Petitions, if any, pending in this Writ Petition shall stand closed.

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_________________________________ KONGARA VIJAYA LAKSHMI, J

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Date:16.12.2020 usd

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M/S Sree Srinivasa Stone Crusher v. the State of Ap

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M/S Sree Srinivasa Stone Crusher v. the State of Ap

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