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PETITIONER: M/s.  BHARAT BARREL & DRUM MFG.  CO.

       Vs.

RESPONDENT: L. K. BOSE & ORS.

DATE OF JUDGMENT: 05/10/1966

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. WANCHOO, K.N. MITTER, G.K.

CITATION:  1967 AIR  361  CITATOR INFO :  RF         1976 SC 425  (13)

ACT: Essential  Commodities Act, 1955-Steel Control Order,  1956- Controller   cancelling   allotment   of   steel   sheets-In subsequent inquiry refusing to record oral  evidence-Natural justice  whether violated-Error apparent on face  of  award, what is.

HEADNOTE: The   appellant   company  carried  on   the   business   of manufacturing  barrels and for that purpose  required  steel sheets.   By ’reason of the Essential Commodities Act,  1955 the  Iron & Steel (Conirol) Order, 1956 and  diverse  orders passed  by  the  Iron and  Steel  Controller  the  appellant company  could get supply of steel sheets only by  obtaining release   orders  from  the  Controller  on  stockists   and importers.  The Controller would direct under such a release order  an importer or a stockist to supply steel  sheets  to the  appellant company at rates and on terms and  conditions specified  by him therein.  By three such release orders  of October  28  and 29, 1960 the Controller  directed  the  6th respondent to supply to the appellant a certain quantity  of steel sheets at a specified rate.  There was dispute between the  appellant and the 6th respondent as to the quantity  to be  supplied and the rate of supply.  The appellant  claimed that  it had already -paid an excess. sum of Rs. 7 lacs  and odd  to  the 6th respondent in respect  of  earlier  release orders.  On the dispute being referred to the Controller  he ordered  the  6th respondent to supply steel sheets  to  the appellant  at the specified rate after making allowance  for the  excess  of Rs. 7 lacs and odd already  paid.   He  also ordered that if the appellant did not pay the price and  the transaction was not completed Within a certain time owing to the  fault of the appellant be would allot the steel  sheets to   some  other  party.   Owing  to  the   persistence   of differences with the 6th respondent the appellant could  not carry  out the transaction but instead filed a suit  in  the High Court.  The Controller then cancelled the allotment  in favour of the appellant.  Against this order of cancellation the appellant filed a writ petition in the High Court.   The

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High  Court passed a consent order asking the Controller  to ’hear’  the parties and decide whether the appellant was  at fault  in  not  lifting  the  goods.   At  the  bearing  the appellant  wanted to examine a witness but the  request  was refused  by the Controller.  The Controller decided  against the-  appellant.  The appellant filed another writ  petition in  the  High Court.  The writ petition and  the  subsequent letters  patent  appeal  filed by the  appellant  were  both dismissed.  The appellants came to Court and contended : (1)  The  Controller by refusing to examine  the  appellants witness violated natural justice. (2)  On the question of the refund of the excess charges the Controller’s  order suffered from an error apparent  on  the face of the record; and (3)  The finding of the Controller that the appellant wanted to pick and choose the goods was without evidence. HELD  : (i) While considering the question of breach of  the principles  of natural justice the court should not  proceed as if there are any 740 inflexible   rules   of   natural   justice   of   universal application.  The Court has to consider in each case whether in  the light of the facts and circumstances of  that  case, the  nature  of  the issues involved in  the  inquiry,,  the nature  of  the  order  passed  and  the  interest  affected thereby,  a fair and reasonable opportunity of  being  heard was  furnished by the person affected.  A refusal to  record oral evidence does not necessarily mean contravention of the rules of natural justice. [746 D; 747 G-H] Local  Government  Board v. Arlidge, [1915]  A.C.  120,  New Prakash Transport Co. Ltd. v. New Suwarna Transport Co. Ltd. [1957]  S.C.R.  98, Western India Match  Co.  v.  Industrial Tribunal, Madras, [1962] 1 L.L.J. 629 De Verteuil v.  Knaggs JUDGMENT: [1943] A.C. 627., and Union of India v. T.   R. Varma, [1958] S.C.R. 499, referred to. The  Controller  had heard the case of the  parties  through their counsel.  The witness was a director of the  appellant company.  Being present at the hearing,he    could     have instructed  counsel  to state all that he wanted to  depose. That  not  having  been  done  the  company  could  have  no grievance of nothaving  been heard.         The  witness produced  by the appellant was not of a material  character. On  the facts of the case the refusal of the  Controller  to examine the witness in question did not constitute a  breach of natural justice. [749 C-D; 750 C], (ii)An error of law on the face of an award means that  the court must first find whether there is any legal proposition which is the basis of the award.  Reading the impugned order it was difficult to say what legal proposition it  contained in respect of which it could be said that there was an error on the face of the record. [750 D-E] (iii)It  could not be said that there was  no  evidence that  the  appellant company wanted to pick and  choose  the goods. [751 G]

& CIVIL APPELLATE JURISDICTION   Civil Appeal No. 928 of 1965. Appeal  by special leave from the judgment and  order  dated April  24,  1964 of the Calcutta High Court in  Appeal  from Original Order No. 269 of 1963. Bishan Narain, B. Dutta, S. C. Chagla, Ravinder Narain,  for the appellant.

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B.   Sen and R. H. Dhebar, for respondents Nos. 1-5. A.   K.  Sen,  Rameshwar Nath, S. N. Andley,  P.  L.  Vohra, Mahinder Narain, for respondent No. 6. The Judgment of the Court was delivered by Shelat, J.-This appeal by special leave is directed  aganist the  judgment and order of the High Court at Calcutta  which upheld  the judgment and order of the Single Judge  of  that High.   Court  dismissing the writ pettition  filed  by  the appellant company. The appellant company was at all material times carrying  on the  business of manufacturing barrels and for that  purpose required   steel  sheets.   By  reason  of   the   Essential Commodities Act, 741 1955,  the Iron and Steel (Control) Order, 1956 and  diverse orders passed by the Iron and Steel Controller the appellant company  could  get  supplies  ‘ of  steel  sheets  only  by obtaining  release orders from the Controller  on  stockists and  importers.   The Controller would direct under  such  a release  order  an importer or a stockist  to  supply  steel sheets  to the appellant company at rates and on  terms  and conditions specified by him therein.  By three such  release orders,  of October 28 and 29, 1960 the Controller  directed the 6th respondent M/s.  Amichand Pyarelal & Co., to  supply to  the  appellant  company 3406.386 metric  tons  of  steel sheets.   Prior to these three orders certain other  release orders  had  been  issued  on the  6th  respondent  and  the appellant company had paid large amounts in respect of steel sheets  supplied  thereunder  on  the  basis  of  pro  forma invoices  issued  by  the 6th respondent  and  their  sister concerns.  An amount of Rs. 7 lacs and odd said to be excess payment  was claimed by the appellant company from  the  6th respondent to recover which the appellant company had  filed suits in August 1961 and January 1963 in the High Courts  at Bombay and Calcutta.  In pursuance of the said three release orders  the  6th respondent sent its pro forma  invoice  but only  for  2,168 tons and odd stating that  it  had  already delivered between November 1961 and February 1962, 1238 tons and odd in part satisfaction of the said release orders.  In these  invoices  the 6th respondent claimed Rs.  975.55  per metric ton which was a higher rate than the one fixed by the Controller.   The appellant company thereupon  tendered  the price  at  the rate fixed by the Controller  also  deducting therefrom  the said excess of Rs. 7 lacs and odd.   The  6th respondent  declined  to  accept  the  same  whereupon   the appellant   company  apprised  the  Controller   about   the difference  between them.  By his order dated 1/2 May,  1962 the  Controller  directed  that the  6th  respondent  should charge  the  appellant company at the rate of  Rs.  921  per metric ton and deduct the excess charges paid to it earlier. He also directed the 6th respondent to send to the appellant company  revised pro forma invoice within three  days.   The order  also  stated that the appellant company  should  make arrangement for payment within three days of the receipt  of the  revised pro forma invoice and that if  the  transaction was  not completed by May 12, 1962 due to any fault  on  the part of the appellant company he would consider the disposal of  the  said  sheets in favour of some  other  party.   The Controller  sent  a  copy of this letter  to  the  appellant company  and  in  the note  appended  thereto  informed  the company  that  it should lift the materials before  May  12, 1962.   The  6th  respondent  thereafter  sent  its  revised invoice  at the rate directed by the Controller but  without adjusting the said excess and insisting that 1,238 tons  and odd were already delivered and that only 2,168 tons remained

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to  be delivered.  In the said invoice it also included  the price  of  1,238  tons  at Rs.  921  per  metric  ton.   The appellant company tendered its banker’s slip at the rate  of Rs. 921 per ton after deducting therefrom 742 the  said amount of Rs. 7 lacs and odd as excess payable  to it  by  the 6th respondent.  The 6th respondent  refused  to accept the said slip and instead sent on May 7, 1962 another invoice without adjusting the said excess thus, according to the  appellant company, making it impossible for it to  lift the steel sheets.  The appellant company filed another  suit in  the  High  Court at Bombay inter alia  for  a  mandatory injunction  directing  the  6th respondent  to  deliver  the entire  quantity  of  3,406 tons and odd at  Rs.  921  after deducting from the price therefore the said excess of Rs.  7 lacs. By his order dated 24/26 May, 1962 addressed to the 6th res- pondent  the Controller allotted 2,168 and odd tons  of  the said steel sheets in favour of the 7th respondent cancelling the allotment in favour of the appellant company.   Appended to the said order was a note of the Controller addressed  to the appellant company which ran as follows "Due to their non-lifting of Drum sheet 18G for 2168.25  M/T against....  (the  said  three  release  orders),  they  are advised to note that the same quantity of allotment  against the  said  R/Os  has been treated as  cancelled,  matter  is treated as closed finally." Against  this order of cancellation the appellant  corn  any filed  a  writ petition in the High Court at  Calcutta.   It came up for hearing on September 14, 1962 before Banerjee J. when  the  parties took a consent order.  The  said  consent order  provided  ,  inter alia, that  the  Controller  shall himself  "hear" the parties and ascertain for himself  which of  them was at fault in making the said order of  1/2  May, 1962  ineffective.  It also provided that if the  Controller were to find that the appellant company was not at fault but that  the order could not be complied with by it because  of any unreasonable stand taken by the 6th respondent he should reconsider his said order of cancellation of allotment.   On the other hand if he were to find that the appellant company was at fault he need not change the said cancellation order. In pursuance of the said consent order the Controller  fixed December   13,  1962  for  hearing  the  parties  and   gave permission  to them to appear through counsel.  On the  13th and the 18th December, 1962 the Controller heard the parties who   appeared   through   counsel  and   took   on   record correspondence,  affidavits and other documents produced  by the parties.  The’ appellant company contended that the  6th respondent  failed to implement the said order  and  thereby made  it  ineffective.   The contention  was  that  the  6th respondent  was not justified in offering delivery of  2,168 and odd tons only instead of 3,406 and odd tons, that it was not  justified  in claiming that the delivery  of  the  said 1,238  tons and odd was under the said release orders,  that the  said  1,238 tons and odd were delivered  under  and  in pursuance of an oral agreement arrived at between 743 Lalta Prasad Goenka, a director of the appellant company and one  Jitpal on behalf of the 6th respondent  whereunder  the 6th respondent had agreed to deliver 4,500 tons from out  of its free sale stock at Rs. 875 per ton, that the said  1,238 tons  having  been delivered under the  said  agreement  the entire  quantity of 3,406 tons and odd remained  undelivered and  that therefore its offer to deliver only 2,168 and  odd tons  was not a proper -offer.  The appellant  company  also

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contended  that  the  6th respondent failed  to  deduct  the excess  amount of Rs. 7 lacs and odd though directed by  the Controller  and further that it was not entitled  to  charge the  said 1,238 tons and odd at Rs. 921 per ton as the  said quantity  as  aforesaid was delivered under  the  said  oral agreement and therefore could charge at Rs. 875 per ton.  It also contended that in spite of specific directions from the Controller  the  6th  respondent failed  to  send  its  said revised  pro  forma  invoice within three  days.   The  last contention however was not pressed and it need not therefore detain us.  At the time of the hearing the appellant company offered  to  examine  the said Lalta Prasad  Goenka  as  its witness  to prove the said oral agreement.  The  Controller, however, refused to record his evidence. On December 21, 1964 the Controller passed his order holding the  appellant company responsible for not carrying out  his directions  in the order dated 1/2 May, 1962 and  held  that the  cancellation  of allotment in favour of  the  appellant company need not be reconsidered.  As regards the  appellant company’s  application to examine the said Lalta Parsad,  he gave three reasons for refusing it: (1) that he was not in a position  to  take down the evidence; (2) that  it  was  not possible  for  him  to examine him on  oath  or  on  solemn, affirmation;  and (3) that his evidence would not have  been conclusive  as one party would have asserted and  the  other party would, have denied the aid agreement. Aggrieved  by this order the appellant company filed a  writ petition  in the High Court at Calcutta for having the  said order  quashed.  The writ petition was heard by Banerjee  J. who dismissed it on the ground that the said order could not be  held to be mala fide or one made at the instance  of  or with a view to help the 6th respondent as alleged.  He  held that even if the Controller was wrong in refusing to  record the  testimony  of  Lalta  Prasad such  a  refusal  was  not perverse  or wanting in bona fides.  The learned Judge  also held  that the finding of the Controller that the  appellant company’s  demand  for inspection and survey  of  the  goods offered  by the 6th respondent was unreasonable was  in  the circumstances  of the case neither perverse  nor  arbitrary. He also held that though the Controller’s refusal to examine Lalta Prasad ’was unfortunate, and the reasons given by  him were open to criticism it could not be said to be  perverse. He  observed that though a different view could be taken  on the  question as to blame worthiness the view taken  by  the Controller  could not be said to be arbitrary  or  perverse, for,- 744 it  was  difficult  for  the Controller  to  decide  on  the evidence  adduced by the parties whether the 6th  respondent was guilty of not offering the full quantity of goods  under the  said release orders.  The learned Judge added that  the Controller may be right in condemning the appellant  company for  its  insistence that goods should be  of  standard  and merchantable   quality.   The  pendency  of  the   appellant company’s suit to recover the said excess may also have made it  difficult  for  the  Controller to  hold  that  the  6th respondent was to be blamed in not adjusting the said excess in  the  said  revised  pro forma  invoice.   If,  in  these circumstances,  the  Controller  held  that  the   appellant company  was  more to be blamed than the 6th  respondent  it would  not  be  possible to quash his order  either  on  the ground  of  its being arbitrary or  perverse.   The  learned Judge  examined  the appellant company’s letters  dated  the 9th,  the 11 th, the 17th of January, 1962 and  February  6, 1962  and  found  that  its case with  regard  to  the  oral

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agreement  suffered from contradictions, for, at  one  stage its  case was that the 6th respondent had agreed  to  supply 4,500 tons over and above 3,400 and odd tons under the  said release orders and the said 1,238 tons were delivered  under the  said oral agreement while in the letter of February  6, 1962  its  case was that the 6th respondent was  to  deliver 4,500  tons which would include the said 3,400 and odd  tons deliverable under the said release orders and charge at  the rate  of Rs. 875 per ton.  Therefore, the delivery of  1,238 tons, if this letter were to be true, would be not under the oral agreement but under the release orders and consequently the 6th respondent could not be said not to have offered the full  quantity under the said release orders.  On the  other hand, there was also the letter of the 6th respondent to the Steel  Minister in which it had complained of the  appellant company not having taken delivery at all.  If its case  that 1,238  tons  were delivered under the  release  orders,  was correct the statement made by it to the said Minister  would obviously  be not correct.  In the view of Banerjee  J.  the Controller   took  a  very  lenient  view  when  he   simply characterised  the  letter as unethical.  He  observed  that instead  of speculating about the unethical attitude of  the 6th  respondent  the Controller could well  have  agreed  to record the evidence of the said Lalta Prasad.  According  to the  learned Judge, howsoever unfortunate that  refusal  was the order could not be held to be perverse or arbitrary  and since  the case of the appellant company regarding the  oral agreement  was  inconsistent  the Controller  could  not  be blamed for not accepting it though it might be that a  court of law might come to a different conclusion. Against the order of Banerjee J. the appellant company filed Letters  Patent Appeal which was heard by a  Division  Bench consisting  of Bachawat and A. K. Mukherjee JJ.  Before  the Division Bench the Controller’s finding that it was for  the first  time  that  in  its letter  dated  May  8,  1962  the appellant company made it a condition 745 that  it  would  accept  delivery only  of  goods  found  on inspection  to be of standard and merchantable quality,  was challenged.   The  appeal court found that even  before  the said letter of May 8, 1962 there was correspondence in which allegations  of  the goods having become rusty  and  damaged were  made and a demand for inspection was also  made.   But the appeal court found that those letters indicated that the appellant  company  was agreeable to take  delivery  of  the goods  in their present condition but was insisting  upon  a certificate  of  their being merchantable or not  so  as  to enable it to demand rebate.  Therefore the Controller was in a  way right when he said that it was for the first time  in its  letter of the 8th May, 1962 that the appellant  company insisted that it would accept only those goods which were of standard  and merchantable quality.  The appeal  court  also rejected  the  company’s contention that until May  7,  1962 when the 6th respondent sent its revised invoice asking  the appellant  company to take delivery of the goods as  "it  is lying with us" the appellant company had no chance to  raise this   point.   The  learned  Judges  observed   that   that contention  was  not sustainable as  the  appellant  company could have made a demand for the goods being of standard and merchantable  quality earlier as the  correspondence  showed that  it was all along aware that the said goods had  become rusted.   The proper thing for the appellant company  there- fore  was  to  waive  the said  condition  assuming  it  was entitled  to  insist upon it and subsequently  claim  rebate particularly as the demand for inspection was only with  the

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object  of  claiming rebate.  As  regards  the  Controller’s finding that the appellant company was more to be blamed for the  non-implementation of the order of 1/2 May,  1962,  the learned  Judges  observed  that though  the  Controller  had directed  the 6th respondent to deduct the said  excess  and though  the  6th  respondent  had  not  done  so  there  was difficulty  in the way of the Controller to throw the  blame on  the  6th  respondent.   Neither  party  had  asked   the Controller to fix the amount of the said excess and the time when the appellant company should withdraw its suit.   There was  besides discrepancy in the amount of excess claimed  by the  appellant  company.  In its letter dated  February  23, 1962  to  the Controller the excess amount claimed  was  Rs. 7,40,595  whereas in its letter dated April 23, 1962 to  the 6th  respondent the claim was for Rs. 7,64,438.40  nP.   The difficulty therefore was as to what was the amount which the 6th  respondent  was  expected to refund.   As  regards  the Controller’s  refusal  to record the evidence  of  the  said Lalta Prasad the learned Judges were of the view that it was not  incumbent upon the Controller to record such  evidence, that  the Controller had given adequate opportunity to  both the  parties to adduce their respective case, that  all  the relevant correspondence and documents were produced by  them before  the Controller and that therefore it was  impossible to  hold  that  there was any breach of  the  principles  of natural justice.  In this view the Division Bench  confirmed the order of Banerjee J. and dismissed the appeal. up. C.I./66-3 746 Challenging  the order of the High Court Mr.  Bishan  Narain for the appellant company raised three contentions : (1)  that the Controller did not hear the appellant  company in  full and violated the principles of natural  justice  by refusing to record the evidence of Lalta Prasad; (2)  that  on the question of refund of the  excess  charges the  Controller’s  order  suffered  from  an  error  of  law apparent on the face of the record; and (3)  that  the finding of the Controller that the  appellant company wanted to pick and choose was without evidence. In order to appreciate the first contention it is  necessary first  to consider the content of the principles of  natural justice.   That  question has been the subject-matter  of  a number  of  decisions.  It is now  well-settled  that  while considering  the  question of breach of  the  principles  of natural justice the court should not proceed as if there are any inflexible rules of natural justice of universal  appli- cation.   The Court therefore has to consider in  each  case whether in the light of the facts and circumstances of  that case, the nature of the issues involved in the inquiry,  the nature  of  the  order passed  and  the  interests  affected thereby,  a fair and reasonable opportunity of  being  heard was  furnished to the person affected.  In Local  Government Board v. Arlidge(l), Lord Parmoor observed as follows:- "Where,  however, the question of procedure is raised  in  a hearing,  before  some tribunal other than a court  of  law, there  is  no  obligation  to adopt  the  regular  forms  of judicial procedure.  It is sufficient that the case has been heard  in  a  judicial spirit and  in  accordance  with  the principles  of substantial justice.  In determining  whether the  principles  of substantial justice have  been  complied with in matters of procedure regard must necessarily be  had to  the  nature  of  the issue  to  be  determined  and  the constitution of the Tribunal." A  similar approach to the question is also to be  found  in New  Prakash Transport Co.. Ltd.., v. New Suwarna  Transport

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Co.  Ltd.(2),  where  this Court  laid  down  the  following guiding criterion :- "Rules  of  natural justice vary with  the  varying  consti- tutions of statutory bodies and the rules prescribed by  the legislature  under which they have to act, and the  question whether in a particular case they have been contravened must be judged not by any preconceived notion of what they may be but in the light of the provisions of the relevant Act." (1)[1915] A.C. 120. (2) [1957] S.C.R. 98. 747 In that case r. 73 of the Rules framed under the Motor Vehi- cles  Act,  IV of 1939 provided that the,  Chairman  of  the Provincial Transport Authority on receipt of an appeal shall appoint the ,time and place for hearing the appeal and shall give a notice of not less than thirty days to the appellant, the  original authority and any other person  interested  in the  appeal  and  on such appointed or  adjourned  date  the appellate  authority "shall hear such persons as may  appear and,  after  such further enquiry, if any, as  it  may  deem necessary,  confirm,  vary, or set aside the  order  against which  the appeal is preferred." At page 105 of  the  report the  Court observed that neither the sections nor the  rules framed  under the Act contemplated anything  like  recording oral  or documentary evidence in the usual way as in  courts of  law, nor did they contemplate a regular hearing as in  a court  of  justice.   The  Court  also  observed  that   the provisions of the Act and the Rules did not provide for  any elaborate procedure as to how the parties interested had  to be  heard  in  regard to the question as to  who  should  be granted  a  stage  carriage permit.  This Court  held  on  a consideration  of  the provisions of the Act and  the  Rules that  though  the appellate authority had to function  in  a quasi-judicial  capacity but not as a court of law,  it  was not required to record oral or documentary evidence and that the  only  requirement  was that in  considering  the  rival claims  for the stage carriage permits the authority had  to deal with such claims in a fair and just manner.  Similarly, in   Western  Indian  Match  Co.  v.  Industrial   Tribunal, Madras(’)  this Court once again stated that the  Industrial Tribunal  was not bound by the strict rules of procedure  of the Evidence Act and that if having regard to the fact  that the agreement alleged was denied by the respondents, it came to  the  conclusion that proof of the  agreement  would  not really  matter, that clearly would be a decision within  its jurisdiction  and  it would be unreasonable  to  invoke  the prerogative jurisdiction of the High Court-under Art. 226 to overrule  or reverse such a conclusion.  As in  the  present case  the  dispute between the parties there was as  to  the existence  of  an  agreement said to have  been  arrived  at before the conciliation officer.  The Tribunal had held that the agreement reached between the parties had been  recorded by the conciliation officer in some of his letters and so it was  only a matter of construction of those letters  and  in that  view refused to examine the conciliation officer.   It was  in  connection with the Tribunal’s refusal  to  examine that   officer   that   this  Court   made   the   aforesaid observations. (See also De Verteuil v. Knaggs & Anr.(2)). It is  thus clear that a refusal to record oral  evidence  does not  necessarily mean contravention of the rules of  natural justice. Mr.  Bishan  Narain, however, relied upon two  decisions  in General Medical Council v. Spackman(3) and Union of India v. T.   R.  Varma  (4).  In  Spackman’s  case(3)  a  registered

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medical practi- (1)  [1962] 1 L.L.J. 629. (3)  [1943] A.C. 627. (2)  [1918] A.C. 557. (4)  [1958] S.C.R. 499. 748 tioner  who was a co-respondent in a divorce suit, was  held by  the Divorce Court to have committed adultery  with  Mrs. Pepper,   the   respondent  therein,  with   whom   he   had professional  relationship and a decree nisi was  pronounced which  was subsequently made absolute.  The General  Medical Council  appointed under the Medical Act, 1958  served  upon Spackman  a  show cause notice why his name  should  not  be erased  from the medical register for infamous  conduct  and professional misconduct.  At the hearing Spackman’s attorney applied  for  permission to lead evidence to  challenge  the finding  of  adultery of the Divorce  Court  which  evidence though available was not produced during the hearing of  the Divorce  Suit.  The Council rejected the application on  the ground  that  the  practice followed by it  did  not  permit leading of additional evidence and accepted the decree  nisi as  prima  facie  proof of adultery and  directed  that  the petitioner’s  name should be removed from the register.   On appeal  the House of Lords held that while the  Council  was entitled  to regard the decree in the divorce suit as  prima facie  evidence  of  adultery,  it was  bound  to  hear  any evidence  tendered  by  the  practitioner  and  that  having refused to hear such evidence, it had not made "due inquiry" as contemplated by s. 29 of the Act.  It should be  observed that  this conclusion was based on the provisions of  s.  29 which provided for "due inquiry" and (as is clear from  page 645  of  the Report) on Rule 9 which, inter  alia,  provided that the Council shall call upon the practitioner "to  state his  case  and to produce evidence in support of  it."  That Rule  also  provided that the practitioner may  address  the Council  either before or at the conclusion of the  evidence but  only once.  It is thus clear that the  Council’s  order was set aside on the footing that it had failed to hold "due inquiry"  within the meaning of s. 29 and the said Rule,  as contrary  to  the provisions of that Rule  the  Council  had prevented  Spackman from leading evidence.  The decision  in Union  of India v. T. R. Varma(l) was in connection with  an inquiry  held  under  Art. 311  of  the  Constitution.   The observations  made  in  that case therefore  would  bear  no analogy to the inquiry held by the Controller in the instant case.  Neither of those two decisions therefore can help Mr. Bishan Narain. It is clear from the said consent order that the  Controller was  not a judicial tribunal in the sense of a Court of  law and  though  the inquiry held by him was  a  quasi-judicial. inquiry  it certainly was not a trial.  It was  confined  to one  question only, viz., whether he ,should reconsider  the order made by him cancelling the allocation in favour of the appellant company.  In order to decide that question he  had to  ascertain who was to be blamed as between the  appellant company and the 6th respondent for non-implementation of his order  dated  1/2  May, 1962.  No doubt  the  consent  order required him "to hear" the parties.  But it is obvious  that the  order  never  contemplated that  he  should  follow  an elaborate procedure and take (1) [1958] S.    99. 749 oral  evidence  of witnesses tendered by the  parties.   The order  did not lay down any such procedure or any  procedure at all, with the consequence that he was left to devise  his

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own procedure.  So long as the procedure devised by him gave a  fair  and  adequate opportunity to  the  parties  to  put forward  and  explain their respective case  such  procedure would  be sufficient and cannot be challenged on the  ground of  any  contravention  of  natural  justice.   The  dispute between  the  parties  was as to the existence  of  an  oral agreement  under  which the 6th respondent  was  to  deliver 4,500  tons of steel sheets.  From that arose  the  question whether  the delivery of 1,238 and odd tons was  made  under the said alleged agreement or under the said release orders. It is not disputed that the Controller heard the parties  on the  13th  and the 18th December, 1962  and  the  respective cases  of  the parties were put forward before  him  through counsel who, we have no doubt, made their submissions fully. The said Lalta Prasad was present at the hearing  presumably giving  instructions  to  the  company’s  counsel.   He  had therefore  ample opportunity to put forward the case of  the appellant  company  in  regard  to  the  said  alleged  oral agreement.  The parties also produced before the  Controller such correspondence and documents as they thought proper and necessary  to establish their case.  There is no doubt  that the letters already referred to above in which the appellant company has set out the said alleged agreement were produced before  the  Controller  and considered by  him.   In  these circumstances it is difficult to appreciate what  difference it would have made if Lalta Prasad’s oral testimony had been recorded.  The letters presumably contained all that he  had to say in regard to the alleged agreement arrived at between him and the said Jitpal.  Obviously he could not have  added anything to those letters nor could he have deposed contrary to  them.  This position seems to have been realised by  the appellant  company.   It  was  therefore  that  though   the Controller  had rejected the application for  recording  the evidence  of  Lalta  Prasad  no  protest  was  made  by  the appellant  company or on its behalf at that stage.  No  such protest was also placed on record between the 18th and  21st December,  1962 when the Controller declared his order.   It was only on the 5th January, 1963 that the attorneys of  the appellant  company complained for the first time  about  the Controller’s  decision rejecting the application  to  record Lalta Prasad’s evidence alleging that the said order of  the Controller  was mala fide.  The appellant company filed  the present  writ petition on January 7, 1963.  It would  appear from  these  facts that the grievance of  Lalta  Prasad  not being allowed to give evidence was made in the letter of the 5th  January,  1963 to bolster up the case in  the  proposed writ  petition  that the said order of  the  Controller  was perverse  and  mala fide.  It is true  that  the  Controller rejected  the appellant company is case about the said  oral agreement  on the ground that the  correspondence  indicated that it had been putting up its case inconsistently.  It may perhaps be said that if 750 Lalta  Prasad had been examined he might have explained  the inconsistency, But as already stated Lalta Prasad had  ample opportunity   through  his  counsel  to  explain  the   said inconsistency.  If that inconsistency had been explained  by the  company’s  counsel  ,during the hearing  it  cannot  be doubted  that  the  Controller would  have  considered  such explanation tendered by counsel.  That being so, the refusal of  the Controller to record Lalta Prasad’s evidence  cannot be  said to have precluded the company from offering an  ex- planation  of  the said inconsistency.  Nor can it  be  said that the refusal amounted to any breach of natural  justice. Since  the procedure for inquiry was left to be  devised  by

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the Controller and the procedure followed by him was not  in any  way  in  contravention of the said  consent  order  nor contrary  to  natural justice the contention  urged  by  Mr’ Bishan Narain must be rejected. The  next  contention of Mr. Bishan Narain was that  on  the question of refund of the excess charges the impugned  order suffered  from an error of law apparent on the record.   The question is what is an error of law apparent on the  record. In Champsey Bhara & Co. v. Jiraj Palle Spinning and  Weaving Co.(’). Lord Dune-din observed that an error on the face  of an award means that the court must first find whether  there is  any  legal  proposition which is the basis  of  such  an award.  He also said that where an award is challenged  upon such a ground it is not permissible to read words into it or to draw inferences and the award or the order must be  taken as it stands.  Tucker J. said the same thing in James  Clark (Brush  Materials)  Ltd  v.  Carters  (Marchants)  Ltd.  (2) Reading the impugned order it is difficult to say what legal proposition  it contains in respect of which it can be  said that  there is an error of law apparent on the record.   The issue before the Controller was whether in refusing to  give the refund of the said excess the 6th respondent was  guilty of  obstructing  the implementation of the order  dated  May 1/2, 1962 or of preventing the appellant company from taking delivery of the said goods.  It is true that the  Controller had on more then one occasion directed the 6th respondent to deduct  the said excess from its pro forma invoice  and  the 6th  respondent  had in fact expressed -its  willingness  to deduct it.  The dispute between the the parties was within a circumscribed  compass viz., whether the  appellant  company should first withdraw the suit.  The appellant company would not  withdraw the suit and hence the controversy.  But  then it  is not possible to say that there was no  difficulty  in the way of the 6th respondent in deducting straightaway  the said  excess from its invoice, for, as already  stated,  the appellant company, had stated different sums of such  excess at different times.  The Controller had not fixed the  exact amount of the said excess an not directed as to when and  on what  condition  the  appellant cornpany’s  suit  should  be withdrawn.   If in these circumstances the Controller  finds that the appellant company would not have insisted (1)  [1923] A.C. 480. (2) [1944] 1 K.B. 566. 751 on  the  deduction before withdrawing its suit,  even  if  a court were to come to a different conclusion it certainly is not a case of an error apparent on the face of the record. That  takes us to the third and the last  contention,  viz., that the impugned order that the appellant company wanted to pick  and choose was without evidence.  The order was  based on the finding that it was for the first time in its  letter dated May 8, 1962 that the appellant company claimed that it would  only  accept  goods  of  standard  and   merchantable quality.  That conclusion, in our view, cannot be said to be without  evidence.   As  explained by the  High  Court,  the appellant company, no doubt, had in its letter of April  23, 1962 claimed survey and inspection but that letter does  not show  that the appellant company was not willing  to  accept the  goods  in the condition in which they were in  the  6th respondent’s  godown.  The demand for inspection and  survey was  made  with a view to claim rebate in the event  of  the goods being found either rusty or in damaged condition.  But in  the  letter  of  May 8, 1962  it  would  seem  that  the appellant  company stiffened its attitude and laid down  the condition  that  it would accept such of the goods  only  as

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were  of  standard  and merchantable  quality.   As  already stated,  long before May 8, 1962 the appellant  company  was well  aware  that the goods had become rusted as  they  were lying  for  a  long  time  in  the  godown.   Even  the  6th respondent  had  complained  that  the  goods  were  getting rusted.   Yet, at no time before May 8, 1962  the  appellant company  had insisted that it would accept only those  goods which  were  of standard and merchantable quality.   It  may perhaps  be  that the Controller could have taken  the  view that  since  the appellant company required  the  goods  for manufacturing  barrels,  it was entitled to  have  goods  of merchantable quality.  At the same time it is also  possible to  take a different view, viz., that the appellant  company could  have  abided by the Controllor’s  directions  in  his order  dated 1/2 May 1962 and could have  accepted  delivery under protest and if necessary claimed damages.  But  merely because  there was the possibility of two views being  taken it  would  not be possible to say, as was contended  in  the High  Court,  that the order was perverse.   In  any  event, since it was for the first time in its letter of May 8, 1962 that the aforesaid demand was made by the appellant  company it  is  impossible to say that this part of  the  order  was without any evidence and therefore liable to be quashed. These  were  the only contentions raised on  behalf  of  the appellant  company.   For the reasons aforesaid  it  is  not possible to uphold any one of them.  The result is that  the appeal fails and is dismissed.  It appears to us, looking at the  entire record of the case that the 6th respondent  also was  not altogether free from blame.  In the  circumstances, we  decline  to  make any order as  to  costs.   Each  party therefore will bear its own costs. G.C.                                                  Appeal dismissed. 752