REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO._____ OF 2010 (Arising out of SLP (Civil) No.20428 of 2007)

M/s. Kranti Associates Pvt. Ltd. & Anr. ..Appellant(s)

Versus  

Sh. Masood Ahmed Khan & Others ..Respondent(s)

WITH CIVIL APPEAL NO._____ OF 2010

(Arising out of SLP (C) NO.12766 OF 2008)

J U D G M E N T

GANGULY, J.

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).

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3. 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:

“Heard. 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  

notification.  

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7. 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;  and  

(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  

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jurisdiction so vested, or has acted  in the exercise of its jurisdiction  illegally  or  with  material  irregularity.”

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  

Commission.  

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  

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(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  oath,  

(ii) the discovery and production  of  any  document  or  other  material object producible as  evidence,  

(iii) the reception of evidence on  affidavits,  

(iv) the  requisitioning  of  the  report  of  the  concerned  analysis  or  test  from  the  appropriate  laboratory  or  from  any  other  relevant  source,  

(v) issuing of any commission for  the  examination  of  any  witness, and  

(vi) any other matter which may be  prescribed.

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13. 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.

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16. 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  

40”.

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’.   

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19. 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  

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appellate 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  

1678-79).

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  

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Bench 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  

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of 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  

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Industrial  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  

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be  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).     

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28. 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  

situation.

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30. 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  

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the 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  

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of  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).   

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37. 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  

284-285).  

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  

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disputed 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  

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intended 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).

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42. 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.”  

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44. 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  

decisions”.

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:

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“..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  

saying:

“..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.   

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49. 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  

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considerations 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  

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.  

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  

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sustaining  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  

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of 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  

decisions”.

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”.   

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.  

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53. 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  

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dated 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  

Commission.

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  

costs.

.....................J. (G.S. SINGHVI)

.....................J. (ASOK KUMAR GANGULY)

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New Delhi   September 08, 2010

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