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PETITIONER: MANAGEMENT OF M/S M.S. NALLY BHARATENGG. CO. LTD.

       Vs.

RESPONDENT: STATE OF BIHAR & ORS.

DATE OF JUDGMENT09/02/1990

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) THOMMEN, T.K. (J)

CITATION:  1990 SCR  (1) 290        1990 SCC  (2)  48  JT 1990 (2)    96        1990 SCALE  (1)156

ACT:     Industrial Disputes Act, 1947: Section 33-B--Transfer of proceedings-Obligation     to    record     reasons--Whether mandatory--Denial   of   opportunity   to   management    to represent--Order whether vitiated.

HEADNOTE:     Sub-section  (1) of S. 33-B of the  Industrial  Disputes Act,  1947 provides that the appropriate Government may,  by order  in  writing  and for reasons to  be  stated  therein, withdraw  any proceedings pending before a Labour  Court  or Tribunal  and  transfer it for disposal  to  another  Labour Court or Tribunal.     Respondent No. 4, a workman of the appellant-company  at Dhanbad, was caught red-handed while stealing certain goods. The  domestic enquiry found him guilty of committing  theft. Consequently,.  he was dismissed from service.  The  dispute arising therefrom was referred to the Labour Court,  Dhanbad under  S.  10(1)(c) of the Act for  adjudication.  When  the matter  was  pending  consideration  the  respondent  sought transfer  of  the case to the Labour Court at Patna  on  the plea that since he was residing at his village near Patna it would  be  difficult for him to attend  the  proceedings  at Dhanbad. That application was made without intimation to the management. The Government, however, without giving opportu- nity  to the management transferred the case to Patna  by  a notification dated August 8, 1988 issued under S. 33B of the Act.  The writ petition filed by the management  seeking  to quash  the notification was dismissed by the High  Court  on the  view that no prejudice was being caused to the  manage- ment  and no allegation of mala fide had been  made  against the presiding officer. Allowing the appeal by special leave, the Court.     HELD: 1.1 The power to transfer a pending case under  S. 33B of the Industrial Disputes Act is not a mere administra- tive but quasijudicial power and the appropriate  Government cannot  transfer a case on the basis of allegations  of  one party  without giving a reasonable opportunity to the  other party to represent its point of view. Such         291 allegations may not be valid or relevant or may not be  true at  all.  That could be tested only if the other  party  has

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notice of the same. [296A-C]     Punjab  Worsted  Spinning Mills, Chheharta v.  State  of punjab & Ors., [1965] II LLJ 218 and Management of Sri  Rani Lakshmi  Ginning  & Weaving Mills Ltd. v. State  of  Madras, [1975] 3 FLR 166, referred to.     Jay  Engineering Works Ltd. v. Fourth Industrial  Tribu- nal, Calcutta, [1977] (Lab) I.C. 1739; Muthe Steels  (India) Ltd.  v. Labour Court, Hyderabad, [1979] (Lab) I.C. 325  and Pioneer  Ltd. v. Labour Court, Gorakhpur, [1983] (Lab)  I.C. 335, overruled.     1.2  What is important in the modern  administration  is the  fairness  of procedure with elimination of  element  of arbitrariness,  for fairness is a fundamental  principle  of good administration. It is a rule to ensure that vast  power in  the modern State is not abused but  properly  exercised. The  State  power is used for proper and  not  for  improper purposes.  The authority is not misguided by  extraneous  or irrelevant  consideration. Fairness is also a  principle  to ensure  that statutory authority arrives at a just  decision either in promoting the interest or affecting the rights  of persons.  The concept that ’justice should not only be  done but  be seen to be done’ is the essence of fairness  and  is equally  applicable to administrative authorities.  Fairness is thus a prime test for proper and good administration.  It has  no set form or procedure. It does not  necessarily  re- quire a-plurality of hearings or representations and counter representations.  It  depends upon the facts of  each  case. [297C, 299C-E]     Ridge  v. Baldwin, [1964] AC 40; A.K. Kraipak & Ors.  v. Union  of India, [1970] 1 SCR 457; Keshav Mills Co. Ltd.  v. Union of India, [1973] 3 SCR 22; Pearlberg v. Varty,  [1972] 1  WLR 534, 547; Mohinder Singh Gill v. Chief Election  Com- missioner,  [1978]  1  SCC 405; Maneka Gandhi  v.  Union  Of India,  [1978] 2 SCR 621; Swadeshi Cotton Mills v. Union  of India,  [1981]  1 SCC 664; Royappa v. State of  Tamil  Nadu, [1974]  2  SCR  348; Union of India  v.  Tulsi  Ram,  [1985] (Supp.) 2 SCR 131; Charan Lal Sahu & Ors. v. Union of India, JT  1989 4 SC 582; Natural Justice by Paul Jackson, 2nd  ed. p. 11 and Pannalal Binjraj & Anr. v. Union of India,  [1957] 31 ITR 565, referred to.     1.3  In  the instant case, the State had  withdrawn  the pending reference from the Labour Court, Dhanbad and  trans- ferred it to another Labour Court at the distant District of Patna, on the represen- 292 tation  of the workman without getting it verified from  the management.  The  State  in fairness ought to  have  got  it verified  by giving an opportunity to the  management  which was a party to the pending reference. The management was not required to establish particular prejudice for want of  such opportunity.  The  non-observance  of  natural  justice  was itself  prejudice to the management and proof  of  prejudice independently  of  proof of denial of  natural  justice  was unnecessary. Denial of the opportunity to the management was thus a fatal flaw to the decision of the Government.  [300H- 30 IA, B-D]     S.L. Kapoor v. Jagmohan, [1981] 1 SCR 746 and Altco Ltd. v. Sutherland, [1971] 2 Lloyd’s Rep. 515, referred to.     2.  The expression ’may’ in Sub-s. (1) of S. 33B of  the Act only makes it discretionary in so far as the appropriate Government  taking a decision as to whether the  power  con- ferred thereunder has to be exercised or not. But when  once a  decision has been taken to transfer a pending  case  then the  requirement  of giving reasons becomes  mandatory.  The authority would be under legal obligation to record  reasons

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in  support  of  its decision. Failure to  give  reasons  or giving reasons not germane would thus be fatal to the  deci- sion. [295C-D]     Associated  Electrical Industries (P) Ltd. v. Its  Work- men,  [1961]  II LLJ 122 and Ajanta  Industries  v.  Central Board of Taxes, [1976] 2 SCR 884, referred to.     2.2 In the instant case, the Government has stated  that the  workman  was having his residence at his  village  near Patna  and it would be, therefore, inconvenient for  him  to attend  the Labour Court regularly at Dhanbad. Most  of  the factors, however, do not point that way. The workman and his family  members  seem  to be still residing  in  the  colony quarter at Dhanbad. His two sons are studying in a school at a nearby village. The letter dated September 8, 1988 of  the Headmaster  of  the  said school speaks of  that  fact.  The letter  from the Assistant Electrical Engineer in  proof  of the  electricity  supplied to the quarter  occupied  by  the workman at Dhanbad is also relevant. As against these  mate- rials, the workman has not produced any proof in support  of his  allegation that he has been residing in a village  home near-Patna.  He has not denied the documents annexed to  the special leave petition and not seriously disputed the factum of  his  residence  in the colony quarter  at  Dhanbad.  The Government  was, therefore, misled by the representation  of the workman. [301E-H] 293     3. The notification dated August 8, 1988 is quashed. The Labour Court, Dhanbad shall proceed to dispose of the matter as expeditiously as possible. [302A]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 1102  of 1990.     From the Judgment and Order dated 7.10.1988 of the Patna High Court in C.W.J.C. No. 2075 of 1988.     A.K. Sen, K.D. prasad, J. Krishna and Mrs. Naresh Bakshi for the Appellant. S.K. Sinha and U.S. Prasad for the Respondents. The Judgment of the Court was delivered by: K. JAGANNATHA SHETTY, J. Special Leave is granted.     This appeal from an order of the Patna High Court raises an important question as to the scope of section 33-B of the Industrial Disputes Act, 1947 (’The Act’).     The  facts can be quite shortly stated:  The  appellant- company is mainly engaged in construction of coal  washeries on  contract  basis in different collieries and  also  doing allied and incidental work. Shivaji Prasad Sinha--respondent No. 4 was a Senior Supervisor in the company’s establishment at  Dhanbad. It is said that he was caught red  handed  when carrying  55  pieces of electromagnetic clutch  plates  kept concealed  in  the tool box of his scooter.  The  management held domestic enquiry into the incident and found him guilty of  committing  theft.  He was  accordingly  dismissed  from service.  The dispute arising therefrom was  referred  under Section  10(1)(c)  of the Act to Labour  Court  Dhanbad  for adjudication. The Labour Court registered the case as refer- ence  case No. 4 of 1988 and issued notice to  the  parties. The  parties entered appearance and filed  their  respective pleadings.  When the matter was thus  pending  consideration the  respondent  seems  to have written  to  the  Government stating  that  it would be difficult for him to  attend  the Labour  Court Dhanbad since he has been residing at  Hajipur and  it  would be convenient for him if the case  is  trans-

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ferred  to  Labour Court Patna. That  application  was  made without intimation to the management. The Government  howev- er, has acceded to the request of the respondent and without opportunity to 294 the  management transferred the case to Labour Court  Patna. The Notification issued in that regard reads as follows: "NOTIFICATION          Patna dated 8th August 1988 S.O.  In exercise of powers conferred by sub-section (1)  of Section  33-B  of the Industrial Disputes Act, 1947  (14  of 1947)  the Governor of Bihar after careful consideration  of the application of the petitioner Shri Shivajee Prasad Sinha wherein  he  has  prayed for the  transfer  of  adjudication proceedings  to  Patna keeping in view to  the  difficulties expressed by him to attend the labour court, Dhanbad,  regu- larly due to his residence at Hajipur is pleased to withdraw the  proceeding shown in Annexure ’A’ pending before  Labour Court,  Dhanbad  and  transfer the said  proceeding  to  the Labour  Court, Patna for speedy disposal from the  stage  at which the case is transferred."     The  management  moved  the High Court by  way  of  writ petition  under Article 226 of the Constitution to have  the Notification  quashed.  The  High Court did  not  agree  and summarily dismissed the writ petition with an observation: "Since no prejudice is being caused to the petitioner and no allegation of mala fide has been made against the  presiding officer,  Patna, we are not inclined to interfere  with  the order under challenge. This application is dismissed"     The  management in the appeal challenges the  Government notification  withdrawing and transferring the pending  case from the Labour Court Dhanbad to Labour Court Patna.     Since  the impugned notification has been  issued  under Section 33-B of the Act, we may for immediate reference  set out that Section. Omitting immaterial words, it is in  these terms: "33.B. Power to transfer certain proceedings: (1) The appropriate Government may, by order in writing  and for  reasons to be stated therein, withdraw  any  proceeding under this Act pending before a Labour Court, 295 Tribunal,  or  National Tribunal and transfer  the  same  to another Labour Court, Tribunal or National Tribunal, as  the case  may  be, for the disposal of the  proceeding  and  the Labour  Court,  Tribunal or National Tribunal to  which  the proceeding is so transferred may, subject to special  direc- tions  in the order of transfer, proceed either de  novo  or from the stage at which it was so transferred."     The  Section  33-B  provides power  to  the  appropriate Government  to  withdraw any proceedings  pending  before  a labour  court  or Tribunal and transfer it for  disposal  to another labour court or Tribunal. It could be exercised  suo motu  or on representations of the parties.  The  expression ’may’  in  sub-section  (1) of Section 33-B  only  makes  it discretionary in so far as the appropriate Government taking a decision as to whether the power conferred thereunder  has to be exercised or not. But when once a decision is taken to transfer  a  pending  case then the  requirement  of  giving reasons  becomes  mandatory. The authority  is  under  legal obligation  to  record reasons in support of  its  decision. Reasons  would  be  life of the decision.  Failure  to  give reasons or giving reasons not germane would be fatal to  the decision.     In  Associated  Electrical Industries (P)  Ltd.  v.  Its Workmen, [1961] II LLJ 122, 130 the Government withdrew  and

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transferred a reference from one tribunal to another  tribu- nal  merely stating that expediency required the  withdrawal and  transfer. The validity of the order of  withdrawal  and transfer  was  challenged inter-alia on the ground  that  no reasons  were stated for passing the order.  Gajendragadkar, J.,  (as he then was) speaking for this Court observed  that the requirement about the statement of reasons to be record- ed must be complied with both in substance and in letter. To say that it is expedient to withdraw a case from one  tribu- nal  and  transfer it to another does not amount  to  giving reasons as required by the Section.     In the instant case, the key question for  consideration is  whether the Government before accepting the  representa- tion  of  the  workman and transferring the  case  from  the labour  court,  Dhanbad to labour court, Patna  should  have given an opportunity to the management? The validity of  the reasons given by the Government for transferring the case is another question to be considered.     We will presently consider the question but before doing so  a  brief  survey of some of the  High  Courts  decisions bearing on this aspect may be usefully made. The Punjab High Court in Workman of Punjab 296 Worsted Spinning Mills Chheharta v. State of Punjab &  Ors., [1965] II LLJ 2 18 has expressed the view that the power  to transfer  pending  case  under section 33-B is  not  a  mere administrative but quasi-judicial power and the  appropriate Government  cannot transfer a case on the basis  of  allega- tions of one party without giving reasonable opportunity  to other  party to represent its point of view. This  was  also the  view recognised by the Madras High Court in  Management of Sri Rani Lakshmi Ginning and Weaving Mills Ltd. v.  State of Madras, [1975] 3 FLR 166 at 167. It was explained by  the Madras  High  Court that the reasons given by  a  party  who moved  for transfer may not be valid or relevant or may  not be  true  at  all. Whether such reasons in  fact  exist  and whether  those  reasons have any relevance  for  a  transfer could  be tested only if the other party has notice  of  the same.     The High Courts of Calcutta, Andhra Pradesh and  Allaha- bad  have however, taken contrary view. In  Jay  Engineering Works  Ltd. v. Fourth Industrial Tribunal, Calcutta,  [1977] (Lab)  1C 1739 at 1750 the Calcutta High Court has  observed that  it  would be difficult to appreciate  how  under  such circumstances, the Government could be called upon to give a notice  to the parties before making an order under  section 33-B. There could be no principle involved in giving such  a notice. Nobody’s rights could possibly have been effected in taking such action and there is no question of observing the principles natural justice. The Andhra Pradesh High Court in Muthe Steels (India) Ltd. v. Labour Court, Hyderabad, [1979] (Lab) IC 325 at 329 has adopted a similar line of reasoning. It  was emphasized that Section 33-B in terms does not  con- template any notice being given before a transfer is made of any proceeding from one Labour Court to another. There is no right to any party to have any question decided by a partic- ular  court. An arbitrary exercise of power of  transfer  is adequately  safeguarded  by  the  statutory  requirement  to record  reasons for such transfer. The Allahabad High  Court in Pioneer Ltd. v. Labour Court, Gorakhpur, [1983] (Lab)  IC 335,338 has also expressed similar views.     After  the  leading English case of Ridge  v.  Baldwin,I [1964] AC 40 and an equally important case of this Court  in A.K.  Kraipak  & Ors. v. Union of India, [1970]  1  SCR  457 there was a turning point in the development of doctrine  of

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natural justice as applicable to administrative bodies. Both the  authorities laid down that for application of rules  of natural  justice the classification of functions  as  ’judi- cial’  or  ’administrative’ is not necessary. Lord  Reid  in Ridge  case explained, ’that the duty to act judicially  may arise from the very nature of the 297 function  intended to be performed and it need not be  shown to  be  super added’. Hegde, J., in Kraipak case  said  that under  our  Constitution the rule of law pervades  over  the entire  field  of administration. Every organ of  the  State under  our Constitution is regulated and controlled  by  the rule  of  law.  The concept of rule of law  would  lose  its vitality  if  the  instrumentalities of the  State  are  not charged  with the duty of discharging their functions  in  a fair  and just manner. The requirement of acting  judicially in  essence is nothing but a requirement to act  justly  and fairly  and not arbitrarily or capriciously. The  procedures which are considered inherent in the exercise of a  judicial power are merely those which facilitate if not ensure a just and fair decision.     What  is thus important in the modern administration  is the  fairness  of procedure with elimination of  element  of arbitrariness.  The State functionaries must act fairly  and reasonably.  That is, however, not the same thing  to  state that they must act judicially or quasijudicially. In  Keshav Mills Co. Ltd. v. Union of India, [1973] 3 SCR 22 Mukherjea, J., said (at 30): "The  administrative authority concerned should act  fairly, impartially  and reasonably. Where  administrative  officers are concerned, the duty is not so much to act judicially  as to act fairly."     The  procedural standards which are implied by the  duty to  act fairly has been explained by Lord Pearson in  Pearl- berg v. Varty, [1972] 1 WLR 534,547: "A tribunal to whom judicial or quasi-judicial functions are entrusted  is held to be required to apply those  principles (i.e.  the  rules of natural justice)  in  performing  those functions  unless there is a provision to the contrary.  But where  some person or body is entrusted by  Parliament  with administrative  or executive functions there is no  presump- tion that compliance with the principles of natural  justice is  required although, as ’Parliament is not to be  presumed to  act unfairly’, the courts may be able in suitable  cases (perhaps  always) to imply an obligation to act  with  fair- ness."     In  Mohinder Singh Gill v. Chief Election  Commissioner, [1978]  1  SCC 405 at 434 Krishna Iyer,  J.  commented  that natural justice though 298 varying  is the soul of the rule as fair play in action.  It extends  to both the fields of judicial and  administrative. The  administrative  power  in a democratic  set-up  is  not allergic  to fairness in action and discretionary  executive justice  cannot degenerate into unilateral  injustice.  Good administration  demands fair play in action and this  simple desideratum  is  the fount of natural justice.  Fairness  is flexible  and  it is intended for improving the  quality  of government by injecting fairplay into its wheels.     In  Maneka  Gandhi v. Union of India, [1978] 2  SCR  621 Bhagwati,  J., expressed similar thought that audio  alteram partem  is a highly effective rule devised by the Courts  to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the  abuse or misuse of power.

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   In Swadeshi Cotton Mills v. Union of India, [1981] 1 SCC 664  Sarkaria, J., speaking for himself and Desai, J.,  said that irrespective of whether the power conferred on a statu- tory body or tribunal is administrative or quasi-judicial, a duty  to act fairly, that is, in consonance with the  funda- mental  principles of substantive justice is  generally  im- plied. The presumption is that in a democratic polity wedded to  the rule of law, the State or the Legislature  does  not intend  that in the exercise of their statutory  powers  its functionaries  should act unfairly or unjustly. In the  same case, Chinnappa Reddy, J., added (at 2 12) that the  princi- ples of natural justice are now considered so fundamental as to  be  ’implicit in the concept of ordered  liberty’.  They are, therefore, implicit in every decision-making  function, call  it  judicial, quasi-judicial  or  administrative.  The learned  Judge  went on to state that where the  statute  is silent  about  the observance of the principles  of  natural justice, such statutory silence is taken to imply compliance with  the principles of natural justice. The implication  of natural justice being presumptive, it should be followed  by the  authorities unless it is excluded by express  words  of statute or by necessary implication.     Citations  could  be multiplied since  there  is  fairly abundant case law has come into existence: See, for example, Royappa  v. State of Tamil Nadu, [1974] 2 SCR 348 and  Union of  India  v.  Tulsi Ram, [1985] (Supp.) 2 SCR  13  1.  More recently in a significant judgment in Charan Lal Sahu & Ors. v. Union of India, JT 1989 (4) SC 582 learned Chief  Justice Sabyasachi Mukharji has referred to almost all the  authori- ties  of this Court on this aspect and emphasized  that  the principles of natural justice are fundamental in the consti- tutional  set up of this country. No man or no  man’s  right should be affected without an 299 opportunity to ventilate his views. The justice is a psycho- logical yearning, in which men seek acceptance of their view point  by  having  an opportunity before the  forum  or  the authority  enjoined or obliged to take a decision  affecting their right.     It may be noted that the terms ’fairness of  procedure’, ’fair play in action’, ’duty to act fairly’ are perhaps used as  alternatives  to "natural justice" without  drawing  any distinction.  But Prof. Paul Jackson points out  that  "Such phrases may sometimes be used to refer not to the obligation to  observe the principles of natural justice but,  on  the. contrary,  to  refer to a standard of behaviour  which,  in- creasingly,  the courts require to be followed even in  cir- cumstances  where  the duty to observe  natural  justice  is inapplicable"  (Natural Justice by Paul Jackson 2nd  ed.  p. 11).     We share the view expressed by Professor Jackson.  Fair- ness,  in  our opinion, is a fundamental principle  of  good administration. It is a rule to ensure the vast power in the modern state is not abused but properly exercised. The State power is used for proper and not ’for improper purposes. The authority  is  not  misguided by  extraneous  or  irrelevant consideration.  Fairness is also a principle to ensure  that statutory  authority  arrives at a just decision  either  in promoting  the interest or affecting the rights of  persons. To  use  the time hallowed phrase "that justice  should  not only  be  done  but be seen to be done" is  the  essence  of fairness  equally applicable to administrative  authorities. Fairness  is thus a prime test for proper and good  adminis- tration.  It has no set form or procedure. It  depends  upon the facts of each case. As Lord Pearson said in Pearlberg v.

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Varty,  (at  547), fairness does not necessarily  require  a plurality of hearings or representations and counter  repre- sentations.  Indeed, it cannot have too much elaboration  of procedure since wheels of administration must move quickly.     A  case  with a not dissimilar problem was  in  Pannalal Binjraj and Anr. v. Union of India, [1957] 31 ITR 565. There the  Commissioner  of Income Tax by the power  vested  under section 5(7A) of Income Tax Act, 1922, transferred an asses- see’s  case from one Income Tax Officer to  another  without hearing  the assessee. Section 5(7A) of the Income Tax  Act, 1922 provided: "The  Commissioner of Income-Tax may transfer any case  from one  Income-Tax Officer subordinate to him to  another,  and the Central Board of Revenue may transfer any case from  any one Income-Tax Officer to another. Such 300 transfer  may be made at any stage of the  proceedings,  and shall  not render necessary the re-issue of any  notice  al- ready issued by the Income tax Officer from whom the case is transferred."     This Section did not provide for affording an opportuni- ty  to  the assessee before transferring his case  from  one Income  Tax Officer to another. The assessee challenged  the constitutional  validity of the Section. This  Court  upheld its validity on the ground that it is a provision for admin- istrative convenience. N.H. Bhagwati, J., speaking for  this Court, however remarked (at 589): "   .....  it would be prudent if the principles of  natural justice are followed, where circumstances permit, before any order of transfer under section 5(7A) of the Act is made  by the  Commissioner  of  Income-Tax or the  Central  Board  of Revenue,  as  the case may be, and notice is  given  to  the party  affected and he is afforded a reasonable  opportunity of representing his views on the question and the reasons of the  order are reduced however briefly to writing ...  There is no presumption against the bona fide or the honesty of an assessee  and normally the income-tax authorities would  not be justified in refusing to an assessee a reasonable  oppor- tunity  of  representing  his views when any  order  to  the prejudice of the normal procedure laid down in section 64(1) and (2) of the Act is sought to be made against- him, be  it a  transfer from one Income-Tax Officer within the State  to an Income-Tax Officer without it, except of course where the very  object of the transfer would be frustrated  if  notice was given to the party affected."     Section 5(7A) was replaced by Section 127 of the  Income Tax  Act,  1961,  which now makes it  obligatory  to  record reasons  in making the order of transfer after  affording  a reasonable opportunity of being heard to the assessee in the matter.  In  Ajantha Industries v. Central Board  of  Taxes, [1976]  2  SCR 884 this Court considered the validity  of  a transfer order passed under Section 127 and it was held that merely recording of reasons on the file was not  sufficient. It was essential to give reasons to the affected party.  The order of transfer in that case was quashed for not  communi- cating reasons to the assessee. In  the  present case, the State has withdrawn  the  pending refe- 301 rence  from the Labour Court, Dhanbad and transferred it  to another  Labour Court at the distant District of  Patna,  on the representation of the workman, without getting it  veri- fied  from  the management. The State in fairness  ought  to have got it verified by giving an opportunity to the manage- ment  which is a party to the pending reference.  Denial  of

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that  opportunity  is a fatal flaw to the  decision  of  the Government.     The  management need not establish particular  prejudice for  want of such opportunity. In S.L. Kapoor v.  Jagrnohan, [1981] 1 SCR 746 at 765 Chinnappa Reddy, J., after referring to the observation of Donaldson, J., in Altco Ltd. v.  Suth- erland, [1971] 2 Lloyd’s Rep. 515 said that the concept that justice  must  not only be done but be seen to  be  done  is basic  to our system and it is concerned not with a case  of actual  injustice  but with the appearance of  injustice  or possible injustice. It was emphasized that the principles of natural  justice know of no exclusionary rule  dependent  on whether it would have made any difference if natural justice had been observed. The non-observance of natural justice  is itself prejudice to any man and proof of prejudice independ- ently of proof of denial of natural justice is unnecessary. This  takes  us to the reasons given by  the  Government  in support ’of the order of transfer. The Government has stated that  the workman is having his residence at Hajipur and  it would  be  therefore,  inconvenient for him  to  attend  the labour  court  regularly at Dhanbad. However,  most  of  the factors  do not point that way. The workman and  his  family members  seem  to  be still residing in  colony  quarter  at Dhanbad (Annexure C). His two sons are studying in De Nobili School at Mugma which is a nearby village. Reference may  be made to a letter dated September 8, 1988 (Annexure D) of the Headmaster of the School in which the children of the  work- man  are  studying. Reference may also be made to  a  letter (Annexure E) from the Assistant Electrical Engineer in proof of  the electricity supplied to the quarter occupied by  the workman  at Dhanbad. As against these material, the  workman has not produced any proof in support of his allegation that he has been residing in a village home near Patna. In  fact, in  the  counteraffidavit, he has not denied  the  documents annexed  to  the Special Leave Petition, and  not  seriously disputed  the factum of his residence in the colony  quarter at  Dhanbad.  Even the alleged recommendation  of  the  Ward Commissioner referred in his counter-affidavit has not  been produced. We have, therefore, no hesitation in holding  that the  Government  was  misled by the  representation  of  the workman. 302     In the result, we allow the appeal and quash the notifi- cation dated August 8, 1988 by which the Government of Bihar transferred  the case from the Labour Court, Dhanbad to  the Labour  Court,  Patna. The Labour Court, Dhanbad  shall  now proceed to dispose of the matter as expeditiously as  possi- ble. In  the ’circumstances of the case, we make no order  as  to costs. P.S.    S                                             Appeal allowed. 303