REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL NO.             OF 2008 (Arising out of SLP (C) No.11516 of 2006)

National Insurance Co. Ltd.  ..Appellant  

Versus

Gulab Nabi and Anr.  ..Respondents

J U D G M E N T  

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge  in  this  appeal  is  to  the  order  passed  by  a

Division  Bench of  the  Allahabad High Court  dismissing  the

appeal filed by the appellant summarily.

3. The appeal was filed under Section 30 of the Workmen’s

Compensation  Act,  1928  (in  short  the  ‘Act’).   The  primary

stand taken by the appellant was that the claimant had not

established the employer employee relationship so far as the

insured deceased is concerned.  It was also pointed out that

there is no evidence to show that the deceased had sustained

injuries  under  the  employment  and  in  the  course  of

employment of the deceased insured.

4. A  Claim Petition  was  filed  under  Section  4  of  the  Act

against  owner  of  the  offending  vehicle  and  the  appellant-

National Insurance Co.  The Commissioner directed payment

of  Rs.2,68,800/-  to  respondent   No.1  along  with  interest

@12%.  In  terms  of  Section  20  of  the  Act,  the  appellant-

National  Insurance  Company  was  directed  for  payment  to

respondent No.1. The award made by the Commissioner was

questioned before the High Court in an appeal which came to

be dismissed summarily in the following manner:  

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“Heard learned counsel for the appellant and learned Standing Counsel for the State.

The appeal has got no force.

The appeal is dismissed.”

5. Learned counsel for the appellant submitted that it was

not a case where no substantial question of law is involved.  In

fact,  the  acceptability  of  the  evidence  in  view  of  various

concessions made by the claimant has been completely lost

sight by the High Court.  

6. There is no appearance on behalf  of respondents.   As

rightly  contended  by  learned  counsel  for  the  appellant,  the

question whether the Insurance Company has a liability and,

if  so,  what is the quantum was under  consideration by the

High Court.   There is no suitable evidence so far as income of

the deceased is concerned.  

7. Non-application of mind is clear from the fact that since

the State was not a party, the question of hearing the learned

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Standing  Counsel  for  the  State  does  not  arise.   The  order

therefore  has been passed without any application of mind.

The order is also non-reasoned.  

8. Reasons  introduce  clarity  in  an  order.  On  plainest

consideration of justice, the High Court ought to have set forth

its  reasons,  howsoever  brief,  in  its  order  indicative  of  an

application  of  its  mind,  all  the  more  when  its  order  is

amenable to further avenue of challenge.  

9. Even in respect of administrative orders Lord Denning,

M.R. in  Breen v.  Amalgamated Engg.  Union (1971 (1)  All  ER

1148) observed: (All ER p.1154h) ‘The giving of reasons is one

of  the  fundamentals  of  good  administration.’  In  Alexander

Machinery (Dudley) Ltd. v. Crabtree (1974 ICR 120 (NIRC) it was

observed: ‘Failure to give reasons amounts to denial of justice.

Reasons are live links between the mind of the decision-taker

to the controversy in question and the decision or conclusion

arrived at.’ Reasons substitute subjectivity by objectivity. The

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emphasis on recording reasons is that if the decision reveals

the  ‘inscrutable  face  of  the  sphinx’,  it  can,  by  its  silence,

render it virtually impossible  for the courts to perform their

appellate function or exercise the power of judicial review in

adjudging the validity of the decision. Right to reason is an

indispensable part of a sound judicial system, reasons at least

sufficient  to  indicate  an  application  of  mind  to  the  matter

before court. Another rationale is that the affected party can

know  why  the  decision  has  gone  against  him.  One  of  the

salutary  requirements  of  natural  justice  is  spelling  out

reasons for the order made, in other words, a speaking-out.

The ‘inscrutable face of the sphinx’ is ordinarily incongruous

with a judicial or quasi-judicial performance.

10. The manner in which the appeal has been dismissed is

not the proper course while dealing with the appeal when it

raised substantial question of law.  

11. Above being the position, we set aside the order of the

High Court. The matter is remitted to it for fresh consideration

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in accordance with law. The parties are directed to place fresh

evidence and materials before the High Court for the purpose

of adjudication for disposing of First Appeal No. 836 of 2006.   

12. The appeal is allowed but in the circumstances without

any order as to costs.  

…..…………………..……..…….J. (Dr. ARIJIT PASAYAT)

………..…………….…………….J. (Dr. MUKUNDAKAM SHARMA)

New Delhi, July 24, 2008

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