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PETITIONER: OSSEIN AND GELATINE MANUFACTURERS’ASSOCIATION OF INDIA

       Vs.

RESPONDENT: MODI ALKALIES AND CHEMICALS LTD. & ANR.

DATE OF JUDGMENT10/08/1989

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. MUKHARJI, SABYASACHI (J)

CITATION:  1990 AIR 1744            1989 SCR  (3) 815  1989 SCC  (4) 264        JT 1989 (3)   396  1989 SCALE  (2)265

ACT:     Monopolies  and Restrictive Trade Practices  Act,  1969: Sections  21, 22 and 23--Granting  of  applications--Central Government  bound to give reasoned orders--To appraise  evi- dence  or review such reasoned conclusions--Not  within  the province of Courts.

HEADNOTE:     Respondent  No.  1 made an application  to  the  Central Government  for permission to establish an  undertaking  for the  manufacture  of  Ossein and Gelatine in  the  State  of Rajasthan.  The appellant Association  made  representations before the Central Government objecting to the grant of  the said  application  inter alia on the ground  that  it  would cripple  the small scale business of its members,  who  were already  functioning far below capacity on account of  short supply of crushed bones. The Central Government rejected the objections  and granted the application of  the  Respondent, under  section  22 of the Monopolies and  Restrictive  Trade Practices  Act, by its order dated 20.9.1988.  Aggrieved  by the  said  order, appellant association has  preferred  this appeal under section 55 of the MRTP Act.     On  behalf of the appellant, it was contended  that  the Central  Government has failed to pass a reasoned order  and has not followed the principles of natural justice. Dismissing the appeal,     HELD:  1. The order of the Government is a detailed  and elaborate  one. It sets out the contentions and  deals  with them  seriatim.  The  point made that  existing  units  were already  functioning  below  capacity  due  to  insufficient supply of crushed bones and that the entry of the Respondent No.  1 into the arena would drive them out of  business  has not  been overlooked. Only, as against this, the  Government has considered to be more weighty the economic advantages in granting the application of Respondent No. 1 arising out  of the circumstances that they would be setting up the industry in  a backward area; that they had categorically  undertaken to export at least 60% of their proposed pro- 816 duction; that since they would be producing their own hydro- chloric  acid, the availability of such acid to others  will

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not be affected; and that the short supply of the raw  mate- rial (crushed bones) may not be a constraint for  permitting the  manufacture  of value-added products  like  Ossein  and Gelatine.  The  order bears testimony to the fact  that  the pros  and  cons have been fully considered  and  a  decision taken.  It is not within the province of the Courts  to  ap- praise the evidence or review the conclusion of the  Govern- ment. [818G-H; 819A-B]     Oramco  Chemicals Pvt. Ltd. v. Gwalior Rayon Silk  Manu- facturing  (Weaving) Company Ltd. & Anr., [1987] 2  SCC  620 and  Bombay Oil Industries v. Union of India, [1984]  1  SCR 815, referred to.     2. In the instant case, requirements of natural  justice have been fulfilled and no prejudice has been caused to  the appellant. Of course the order has been passed by an officer different  from the one who heard the parties. However,  the proceedings were not in the nature of formal judicial  hear- ings.  They were in the nature of meetings and full  minutes were  recorded of all the points discussed at each  meeting. The order itself summarises and deals with all the important objections. The delay in the passing of the order also  does not vitiate the order in the absence of any suggestion  that there has been a change of circumstances in the  interregnum brought to the notice of the authorities or that the author- ity passing the order has forgotten to deal with any partic- ular aspect by reason of such delay. The contention that the application of Respondent No. 1 had referred to bonemeal  as the raw material used and this was later changed to ’crushed bones’  is  pointless because it is not  disputed  that  all along the appellant was aware that the reference to bonemeal was  incorrect  and that Respondent No. 1 was going  to  use crushed  bones  in  the project. That  some  documents  were produced at the hearing by Respondent No. 1 which the appel- lant  could not deal with effectively is also without  force as,  admittedly, the appellant’s representatives were  shown those documents but they did not seek any time for consider- ing them and countering their effect. Moreover, the issue is one  of  grant  of approval by the Government  and  not  any particular  officer statutorily designated. It is also  per- fectly clear on the records that the officer who passed  the order has taken full note of all the objections put  forward by the petitioners. [819C-H; 820A-D]

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 27(NM) of 1989. From the Judgment and Order dated 20.9.88 of the Government 817 Of  India, Ministry of Industry, Department of  Company  Af- fairs, Shastri Bhavan, New Delhi in No. 2/51/85-M-II.     Anil  B. Divan, Nitin Thakkar, P.H. Parekh and S.  Dogra for the Appellant.     Anil  Dev Singh, H. Sharma, Sushma Suri,  Harish  Salve, Mohini Sud and Praveen Kumar for the Respondents. The Judgment of the Court was delivered by     RANGANATHAN, J. 1. This appeal has been preferred  under section  55 of the Monopolies & Restrictive Trade  Practices Act  (’the  Act’) from an order of  the  Central  Government (C.G.) dated 20.9.88. By the said order the C.G. granted  an application  made by respondent No. 1 (hereinafter  referred to  as ’the Modis’) under section 22 of the Act for  permis- sion  to  establish an undertaking for  the  manufacture  of Ossein and Gelatine in the State of Rajasthan. The petition-

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er, which claims to be an association of Ossein and  Gelatin manufacturers in India, made representations before the C.G. objecting  to  the grant of the application  by  the  Modis. These  objections having been rejected and  the  application granted  by  the said order, the  aggrieved  petitioner  has preferred this appeal. We admit the appeal and, having heard counsel  on  both sides, proceed to dispose  of  the  appeal finally.     2.  The  following contentions have been  urged  by  Sri Divan in support of the appeal:               (a) The order dated 20.9.88 is vitiated as  it               merely  sets  out the bald conclusion  of  the               officer  concerned.  It is not a  reasoned  or               well considered order.               (b)  The  appellant had pointed out  that  the               grant of permission to Modis would be  against               public  interest. It would completely  cripple               the small scale business of the members Of the               appellant association which, even earlier, had               been  functioning  far below capacity  due  to               insufficient  supply of crushed  bones.  These               objections had not been properly dealt with in               the order.               (c)  The  order  has been passed  by  one  Sri               Vijayaraghavan whereas a personal oral hearing               in  the  matter  had been given  by  Sri  S.S.               Khosla. This has resulted in the violation  of               the  fundamental rule of natural justice  that               "he who hears must decide".               818               (d)  The  hearing had taken place  on  23.1.86               while the final order was passed more than two               and  half years later. This, coupled with  the               change  in  personnel referred to  above,  has               resulted  in the denial of natural justice  to               the petitioner.               (e) Modis had stated in their application that               bonemeal  would  be the raw material  used  by               them but, later, they changed it into "crushed               bones".  The appellant had no  opportunity  of               meeting the new case.               (f) The representative of Modis had  presented               certain documents at the personal hearing  but               copies  thereof had not been supplied  to  the               appellant  despite a grievance made by it  the               very next day.     The  appellant’s  contentions  broadly  fall  under  two heads:  one,  the  denial of natural justice  and  two,  the failure  to pass a reasoned order. It will be convenient  to deal with the latter objection first.     We are unable to accept the appellant’s contention  that the  impugned order is bald, unreasoned or cryptic and  vio- lates  the requirements for such an order enunciated in  the Oramco  case [1987] 2 SCC 620, where this  Court  reaffirmed the  following  observations  made in the  Bombay  Oil  case [1984] 1 SCR 815:               "We must, however, impress upon the Government               that  while  disposing of  applications  under               Sections  21, 22 and 23 of the Monopolies  and               Restrictive Trade Practices Act, 1969, it must               give good reasons in support of its order  and               not  merely  state its  bald  conclusion.  The               faith  of the people in administrative  tribu-               nals  can be sustained only if  the  tribunals               act fairly and dispose of matters before  them

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             by well considered orders  .....  " The order of the Government is a detailed and elaborate one. It  sets out the contentions and deals with  them  seriatim. The point made that existing units were already  functioning below  capacity due to insufficient supply of crushed  bones and  that the entry of the Modis into the arena would  drive them  out  of  business has not been  overlooked.  Only,  as against  this  the  Government has  considered  to  be  more weighty the economic advantages in granting the  application of the Modis arising out of the circumstances: (a) that they would  be  setting up the industry in a backward  area;  (b) that they had categorically 819 undertaken to export at least 60% of their proposed  produc- tion;  (c)  that  since they would be  producing  their  own hydrochloric  acid, the availability of such acid to  others will  not be affected; and (d) that the short supply of  the raw  material  (crushed bones) may not be a  constraint  for permitting  the  manufacture of  value-added  products  like Ossein  and Gelatine. The order bears testimony to the  fact that  the  pros and cons have been fully  considered  and  a decision taken. It is not within the province of the  Courts to  appraise  the evidence or review the conclusion  of  the Government. The first branch of the argument of the  counsel for the appellant, therefore, fails.     On  the issue of natural justice, we are satisfied  that no prejudice has been caused to the appellant by any of  the circumstances pointed out by the appellant. It is true  that the  order has been passed by an officer different from  the one who heard the parties. However, the proceedings were not in the nature of formal judicial hearings. They were in  the nature of meetings and full minutes were recorded of all the points discussed at each meeting. It has not been brought to our  notice that any salient point urged by the  petitioners has  been missed. On the contrary, the order  itself  summa- rises  and  deals with all the important objections  of  the petitioners.  This circumstance has not,  therefore,  caused any  prejudice to the petitioners. The delay in the  passing of  the  order also does not, in  the  above  circumstances, vitiate  the  order in the absence of  any  suggestion  that there has been a change of circumstances in the  interregnum brought to the notice of the authorities or that the author- ity passing the order has forgotten to deal with any partic- ular  aspect by reason of such delay. The argument that  the application of the Modis had referred to bonemeal as the raw material used and this was later changed to "crushed  bones" is  pointless because it is not disputed that all along  the petitioners  were aware that the reference to  bonemeal  was incorrect and that the Modis were going to use crushed bones in  their project. The last contention that  some  documents were  produced at the hearing by the Modis which  the  peti- tioners  could  not deal with effectively  is  also  without force  as, admittedly, the assessee’s  representatives  were shown those documents but did not seek any time for  consid- ering  them and countering their effect. There  has,  there- fore,  been in fact, no prejudice to the  petitioners.  They have  had a fair hearing and the Government’s  decision  has been reached after considering all the pros and cons. We are unable to find any ground to interfere therewith.     There was some discussion before us on a larger question as  to  whether the requirements of natural justice  can  be said to have been 820 complied  with where the objections of parties are beard  by one  officer but the order is passed by another. Sri  Salve,

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referring  to certain passages in Local Government Board  v. Alridge, [1915] A.C. 120; Ridge v. Baldwin, [1964] A.C.  40; Regina v. Race Relations Board, Ex parte Selvarajan,  [1975] 1 WIR 1686 and in de Smith’s Judicial Review of  Administra- tive Action, Fourth Edn. p. 219-220 submitted that this  was not necessarily so and that the contents of natural  justice will vary with the nature of the enquiry, the object of  the proceeding and whether the decision involved is an "institu- tional" decision or one taken by an officer specially empow- ered  to  do it. Sri Divan, on the other hand,  pointed  out that  the majority judgment in Gullappalli Nageswara Rao  v. APSR  TC,  [1959] Supp. 1 SCR 3 19 has  disapproved  of  Al- ridge’s  case  and  that natural justice  demands  that  the hearing  and order should be by the same officer. This is  a very interesting question and Alridge’s case has been  dealt with by Wade (Administrative Law, 6th Edition at pp. 507  et seq.) We are of opinion that it is unnecessary to enter into a  decision  of this issue for the purposes of  the  present case.  Here  the issue is one of grant of  approval  by  the Government and not any particular officer statutorily desig- nated.  It is also perfectly clear on the records  that  the officer who passed the order has taken full note of all  the objections  put  forward by the petitioners.  We  are  fully satisfied,  therefore,  that  the  requirements  of  natural justice have been fulfilled in the present case. For  the reasons stated above, the appeal stands  dismissed. No costs. G.N.                                  Appeal dismissed. 821