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PETITIONER: UNION OF INDIA & ORS.

       Vs.

RESPONDENT: E.G. NAMBUDIRI

DATE OF JUDGMENT23/04/1991

BENCH: SINGH, K.N. (J) BENCH: SINGH, K.N. (J) SAWANT, P.B.

CITATION:  1991 AIR 1216            1991 SCR  (2) 451  1991 SCC  (3)  38        JT 1991 (2)   285  1991 SCALE  (1)783

ACT:      Service Law-Civil Servant-confidential  reports-Adverse remarks-Representation against adverse remarks-Rajection  of representation-Held  rejection  of  representation   neither adversely affects any vested right of Government servant nor does visit him with any civil consequences-In the absence of any  statutory rule or provision the competent authority  is under no obligation to record or communicate reasons for its decision to Government servant.      Confidential report-Remark about integrity of employee, "Nothing  adverse has come to notice"-Held neutral  and  not adverse in nature.      Administrative   Law-Administrative   authority-Natural justice-Duty to give reasons.

HEADNOTE:      The respondent, a Section Officer in the office of  the Chief  Controller  of Import and Exports,  was  communicated adverse remarks for the year 1984. He made a  representation against the adverse remarks but the same was rejected by the Ministry of Commerce by its order dated 6.1.1986. Thereafter he  made a Memorial to the President and the  Government  by its  order  dated 14.8.86 partially   expunged  the  adverse remarks. The respondent filed a petition before the  Central Administrative Trubunal challenging the order rejecting  his representation  on  the ground that it did not  contain  any reasons.  The  Tribunal by its order dated  27.7.87  quashed both  the order dated 6.1.86 as well as 14.8.86  by  holding that  the  orders  were vitiated in law in  the  absence  of reasons.  In appeal to this Court by the Union of India,  it was   contended  on  behalf  of  the  respondent  that   the principles of natural justice require the superior authority to  records  reasons in rejecting the  Government  servant’s representation made against the adverse remarks as the order of rejection affected the respondent’s right.      Allowing the appeal, this Court,      HELD:  1. The superior authority while considering  the represen-                                                        452 tation  of a Government servant against adverse remarks,  is not required by law to act judicially, it is under no  legal

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obligation to record or communicate reasons for its decision to   the   Government   servant.  There  is   no   rule   or administrative order for recording reasons in reacting  such a  representation. In the absence of any statutory  rule  or statutory instructions requiring the competent authority  to record  reasons  in  rejecting a representation  made  by  a Government servant against the adverse entries the competent authority is not under any obligation to record reasons. The decision, rejecting such a representation does not adversely affect  any vested right of the Government servant nor  does it  visit him with any civil consequences. It does not  mean that the competent authority has licence to act arbitrarily, he  must  act in a fair and just manner. He is  required  to consider the questions raised by the Government servant  and examine  the same, in the light of the comments made by  the officer  awarding  the  adverse  entries  and  the   officer counter-signing    the   Confidential   Reports.   If    the representation is rejected after its consideration in a fair and  just  manner,  the  order of  rejection  would  not  be rendered illegal merely on the ground of absence of  reason. In  many  cases  having regard  to  infinite  variations  of circumstances  it may not be possible to  disclose  reasons, for  the  opinion  formed  about the  work  and  conduct  or character  of the Government servant. However, it  does  not mean that the administrative authority is at liberty to pass orders  without  there being any reasons for  the  same.  In Governmental  functioning  before  any orde  is  issued  the matter  is  generally considered at various levels  and  the reasons and opinions are contained in the notes on the file. The  reasons  contained  in the file  enable  the  competent authority  to  formulate  its  ipinion.  If  the  order   as communicated   to  the  Government  servant  rejecting   the representation does not contain any reasons the order cannot be held to be bad in law. If such an order is challenged  in a court of law it is always open to the competent  authority to place the reasons before the Court which may have led  to the rejection of the representation. It is always open to an administrative authority to produce evidence ali-unde before the court to justify its action. [459G-H, 460A, E-F-H, 461A- B]      Gurdial Singh Fijji v. State of Punjab & Ors., [1979] 3 SCR 518, referred to.      2 The President was under no legal obligation to record reasons in rejecting the respondent’s representation against the   adverse  remarks.  Consequently,  the  order  of   the President   was   not   vitiated   in   law.   The   Central Administrative  Tribunal  committed error  in  quashing  the order of the President as well as the order of the  Ministry of Com-                                                        453 merce  dated  6.1.1986. Accordingly,  the  Tribunal’s  order dated 27.7.1987 is set aside. [461C-E]      3.  The purpose of the rules of natural justice  is  to prevent miscarriage of justice and the principles of natural justice  are  applicable to administrative  orders  if  such orders  affect the right of a citizen. Arriving at the  just decision  is  the  aim of both  quasi-judicial  as  well  as administrative   enquiry,   an   unjust   decision   in   an administrative  enquiry  may have more far  reaching  effect than   decision  in  a  quasijudicial  enquiry.   Generally, principles  of natural justice require that  opportunity  of hearing  should  be  given to the  person  against  whom  an administrative   order   is  passed.  The   application   of principles of natural justice, and its sweep depend upon the nature  of the right involved, having regard to the  setting

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and  context  of the statutory provisions.  Where  a  vested right is adversely affected by an  administrative order,  or where  civil  consequences  ensue,  principles  of   natural justice  apply even if the statutory provisions do not  make any express provision for the same, and the person concerned must be afforded opportunity of hearing before the order  is passed. But principles of natural justice do not require the administrative authority to record reasons for its  decision as  there is no general rule that reasons must be given  for administrative   decision.   Order  of   an   administrative authority  which has no statutory or implied duty  to  state reasons  or  the  grounds of its decision  is  not  rendered illegal  merely  on account of absence of  reasons.  It  has never  been  a  principle of natural  justice  that  reasons should be given for decisions. [458H, 459A-D]      State  of  Orissa v. Dr. (Miss) Binapani  Dei  &  Ors., [1967]  2 SCR 625; Mohinder Singh Gill & Ors. v.  The  Chief Election  Commissioner, New Delhi & Ors., [1978] 2 SCR  272; A. K. Kraipak & Ors. v. Union of India & Ors., [1970] 1  SCR 457  and  Regina v. Gaming Board for Great  Britain  ex.  p. Benaim and Khaida, [1970] 2 QB 417, referred to.      3.1.  Though the principles of natural justice  do  not require reasons for decision, there is necessity for  giving reasons  in view of the expanding law of judicial review  to enable  the  citizens to discover the reasoning  behind  the decision.  Right  to reasons is an indispensable part  of  a sound  system of judicial review. Under our Constitution  an administrative decision is subject to judicial review if  it affects  the  right of a citizen, it is  therefor  desirable that reasons should be stated. [459F]      4.  Ordinarily,  Courts  and  Tribunals,   adjudicating rights  of  parties, are required to act judicially  and  to record reasons. Where an                                                        454 administrative authority is required to act judicially it is also  under  an  obligation to  record  reasons.  But  every administrative  authority is not under any legal  obligation to  record reasons for its decision, although, it is  always desirable to record reasons to avoid any suspicion. Where  a statute requires an authority though acting administratively to record reasons, it is mandatory for the authority to pass speaking  orders  and in the absence of  reasons  the  order would  be  rendered  illegal.  But in  the  absence  of  any statutory  or administrative requirement to record  reasons, the  order of the administrative authority is  not  rendered illegal for absence of reasons. If any challenge is made  to the validity of an order on the ground of it being arbitrary or mala fide it is always open to the authority concerned to place  reasons before the Court which may have persuaded  it to  pass  the  orders. Such reasons must  already  exist  on records as it is not permissible to the authority to support the order by communicated to the Government servant. If  the statutory  rules require communication of reasons, the  same must  be  communicated  but  in  the  absence  of  any  such provision absence of communication of reasons do not  affect the validity of the order. [457H, 458A-C]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1976  of 1991.      From  the  Judgment and Order dated  27.7.1987  of  the Central Administrative Tribunal, Delhi in Regn. No.  O.A.No. 511 of 1986.

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    V.C.   Mahajan,   C.V.S.  Rao,  A.K.   Srivastava   and P.Parmeshwaran for the Appeallants.      Dr.  D.C. Vohra, P.K. Bansal and S.K. Bisaria  for  the Respondent.      The Judgment of Court was delivered by      SINGH, J. Leave granted.      This  appeal  is  directed against  the  order  of  the Central  Administrative  Tribunal, Principal  Bench,  Delhi, quashing  the  order  of  the  Ministry  of  Commerce  dated 6.1.1986  rejecting the respondent’s representation  against remarks awarded to him.      E.G.  Nambudiri respondent is a Section Officer in  the office  of Chief Controller of Import and Exports,  Ministry of Commerce. By a                                                        455 memorandum  dated 7th May, 1985, the  Director  communicated adverse  remarks  awarded  to the respondent  for  the  year ending 1984. These remarks were under:          "1. That you were not associated with the important          work  of  the  section  such  as  the  open   house          discussions,   monthly  analysis  of  the   returns          received from regional offices, complaints and port          Officers meetings.          2.  That the quality of performance and  application          of  knowledge, delegated authority  and  conceptual          and professional skills on the jobs is very poor.          3.  That  you  had a casual attitude  to  the  work          assigned.  Your devotion to duty was  insufficient.          That subordinates used to complain that they  could          not  work under you, as you could not  give  proper          guidance.          4.  That your job did not involve contact with  the          public  indications and your  intellectual  honesty          and innovative opaity are average.          5.  That  nothing  adverse  has  come  to   notice          regarding your integrity.          6.   That you were given advice/warning at  various          levels  both orally and in writing but you did  not          react to these."      The respondent made representation against the  adverse remarks  but  the  same  was rejected  by  the  order  dated 6.1.1986. The respondent, thereafter, made a memorial to the President of India against the adverse remarks, as a  result of which the adverse remarks as contained in Item Nos. 1  to 4  as  quoted  above were expunged,  whereas  the  remaining adverse  entries were maintained. The Govt’.s  decision  was communicated by a memorandum dated 14.8.1986. But before the aforesaid decision of the Government partially expunging the adverse remarks could be communicated to the respondent,  he filed a petition before the Central Administrative  Tribunal challenging  the  order of the Ministry  of  Commerce  dated 6.1.1986  rejecting  his  representation  made  against  the adverse  entries. The respondent challenged the order  dated 6.1.1986 rejecting his representation on the ground that  it did  not  contain any reasons. Plea of mala  fide  was  also raised against the Joint Director, Ministry of Commerce, who had awarded  the adverse                                                        456   remarks to the respondent. The Tribunal by its order dated 27.7.1987  quashed the Government Order as contained in  the communication  letter  dated 6.1.1986  and  also  subsequent order  dated 14.8.1986 on the ground that those orders  were vitiated in law in the absence of reasons.      The  Tribunal  held that it was a  basic  principle  of natural justice of every quasi-judicial process, that  order

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should  contain reasons. Arriving at a just decision is  the aim  of  both  quasi-judicial  as  well  as   administrative inquiries,  an unjust decision in an administrative  enquiry may  have more far reaching effect than in a  quasi-Judicial enquiry,  therefore, it was necessary that in rejecting  the representation  against  an adverse entry, reasons  must  be stated  and  in the absence of reasons the  order  would  be arbitrary  and liable to be quashed. Placing reliance  on  a number of decisions of High Courts, the Tribunal held that a bald communication rejecting the representation made against the  adverse entries does not meet the requirement  of  law. The Tribunal further held that in the absence  of reasons it would  follow  that  the competent  authority  rejected  the representation  without  applying its mind  to  the  grounds raised in the representation.      Learned counsel for the parties conceded that there are no   statutory  rules  framed  under  Article  309  of   the Constitution   regulating  the  award  of  entries  in   the character roll of a Central Government employee or providing for filing of representation against the adverse entries, or its  disposal. The entire field in this regard is  regulated by administrative directions issued from time to time. Under these  directions the character roll of Government  servants is  required to be maintained wherein the entries  are  made every  year  by superior competent authority  regarding  the work, conduct and character of the Government servant. These entries  are  confidential  in  nature,  which  contain  the assessment  of  the  work  and  conduct  of  the  Government servant, reflecting his efficiency or defect in his work and conduct.   The   confidential   reports,   contain   general assessment  of character, conduct and qualities of  a  Govt. Servant  which  may include comments about  his  good  work, drive,  initiative,  devotion to duty and  integrity.  These entries  also  reflect  the  inefficiency,  delay,  lack  of initiative,  carelessness in handling the  problems, or  any defect  in  character and integrity. These  entries  contain reference  to any penalty which may have been awarded  to  a government   servant  in  departmental  proceedings.   These entries  are  important in nature as on the basis  of  these entries, a Government servant’s suitability to the office is assessed for the purposes of his confirmation, promotion and even  for retention in service. Any adverse  remark  awarded against a Government servant is                                                        457 communicated to him to afford him opportunity of  explaining the  correct  position  by means of  a  representation.  The competent  authority  is  required to  examine  the  adverse remarks  in consultation, if necessary, with  the  reporting officer  and  counter signing authority.  If  the  competent authority finds that the remarks are justified and there are no  sufficient grounds for interference, he may  reject  the representation  and  the  Government  servant  is   informed accordingly. If, however, the competent authority finds that the adverse remarks are incorrect, unfounded or unjustified, he would expunge the same and inform the Government servant. The  competent authority may having regard to the facts  and circumstances of the cast modify, or tone down the  remarks. The administrative instructions issued by the Government  do not   require  the  competent authority  to  record  reasons either  in  accepting or rejecting the representation  of  a Government  servant, made against adverse entries.      Entries  made  in the character roll  and  confidential record of a Government servant are confidential and those do not  by  themselves  affect  any  right  of  the  Government servant, but those entries assume importance and play  vital

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role  in  the matter relating to confirmation,  crossing  of efficiency bar, promotion and retention in service. Once  an adverse  report  is   recorded, the  principles  of  natural justice  require the reporting authority to communicate  the same to the Government servant to enable him to improve  his work  and  conduct  and also to  explain  the  circumstances leading  to the report. Such an opportunity is not an  empty formality,  its  object,  partially,  being  to  enable  the superior  authorities  to decide on a consideration  of  the explanation  offered  by the person concerned,  whether  the adverse   report  is  justified.  The   superior   authority competent  to  decide  the  representation  is  required  to consider the explanation  offered by the Government  servant before  taking a decision in the matter. Any adverse  report which  is not communicated to the Government servant, or  if he is denied the opportunity of making representation to the superior  authority cannot be considered against  him.  See: Gurdial Singh Fijji v. State of Punjab & Ors., [1979] 3  SCR 518. In the circumstances it is necessary that the authority must  consider  the explanation offered  by  the  Government servant  and to decide the same in a fair and  just  manner. The question then arises whether in considering and deciding the representation against report, the authorities are  duty bound  to record reasons, or to communicate the same to  the person   concerned.   Ordinarily,  Courts   and   Tribunals, adjudicating   rights  of  parties,  are  required  to   act judicially  and to record reasons. Where  an  administrative authority is required to act judicially it is also under an                                                        458 obligation  to  record  reasons.  But  every  administrative authority  is  not  under any  legal  obligation  to  record reasons  for its decision, although, it is always  desirable to  record reasons to avoid any suspicion. Where  a  statute requires  an  authority though  acting  administratively  to record  reasons, it is mandatory for the authority  to  pass speaking  orders  and  the  absence  of  any  statutory   or administrative  requirement to record reasons, the order  of the  administrative  authority is not rendered  illegal  for absence of reasons. If any challenge is made to the validity of an order on the ground of it being arbitrary or mala fide it  is  always  open to the  authority  concerned  to  place reasons before the Court which may have persuaded it to pass the orders. Such reasons must already exist on records as it is not permissible to the authority to support the order  by reasons  not  contained  in the  records.  Reasons  are  not necessary  to be communicated to the Government servant.  If the  statutory rules require communication of  reasons,  the same  must  be communicated but in the absence of  any  such provision absence of communication of reasons do not  affect the validity of the order.      On  behalf  of  the respondent it  was  contended  that principles of natural justice require the superior authority to  record  reasons in rejecting  the  Government  servant’s representation made against the adverse remarks as the order of   rejection affected the respondent’s right. It  is  true that the distinction between judicial act and administrative act has withered away and the principles of natural  justice are now applied even to administrative orders which  involve civil consequences, as held by this Court in State of Orissa v. Dr. (Miss) Binapani Dei & Ors., [1967] 2 SCR 625 What  is a  civil  consequence  has been answered by  this  Court  in Mohinder   Singh   Gill  &  Ors.  v.  The   Chief   Election Commissioner,  New  Delhi & Ors., [1978] 2 SCR  272  Krishna Iyer, J. speaking for the Constitution Bench observed:          "But  what  is  a civil  consequence,  let  us  ask

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        ourselves,  by passing verbal  booby-traps?  "Civil          consequences"  undoubtedly cover infraction of  not          merely  property  or personal rights out  of  civil          liberties,  material deprivations and  nonpecuniary          damages.   In   its   comprehensive    connotation,          everything that affects a citizen in his civil life          inflicts a civil consequence."      The  purpose  of the rules of natural  justice   is  to prevent  miscarriage of justice and it is no more  in  doubt that  the  principles of natural justice are  applicable  to administrative orders if such orders affect the right of                                                        459 a citizen. Arriving at the just decision is the aim of  both quasi-judicial as well as administrative enquire, an  unjust decision  in  an administrative enquiry may  have  more  far reaching  effect than decision in a quasi-judicial  enquiry. Now,  there  is  no doubt that  the  principles  of  natural justice  are  applicable even to  administrative  inquiries. See: A.K. Kraipak & Ors. v. Union of India & Ors., [1970]  1 SCR 457.      The  question is whether principles of natural  justice require  an  administrative  authority  to  record  reasons. Generally,  principles  of  natural  justice  require   that opportunity  of  hearing   should be  given  to  the  person against   whom  an  administrative  order  is  passed.   The application of principles of natural justice, and its  sweep depend upon the nature of the rights involved, having regard to  the  setting and context of  the  statutory  provisions. Where   a  vested  right  is   adversely  affected   by   an administrative  order,  or where civil  consequences  ensue, principles  of natural justice apply even if  the  statutory provisions  do not make any express provision for the  same, and  the  person concerned must be afforded  opportunity  of hearing  before  the  order is  passed.  But  principles  of natural justice do not require the administrative  authority to  record reasons for its decision as there is  no  general rule that reasons must be given for administrative decision. Order of an administrative authority which has no  statutory or  implied  duty  to state reasons or  the  grounds  of  it decision  is  not  rendered illegal  merely  on  account  of absence of reasons. It has never been a principle of natural justice  that  reasons should be given for  decisions.  See: Regina  v. Gaming Board for Great Britain ex p.  Benaim  and Khaida  [1970]  2 QB 417 at 431. Though  the  principles  of natural  justice do not require reasons for decision,  there is necessity for giving reasons in view of the expanding law of  judicial review to enable the citizens to  discover  the reasoning  behind  the  decision. Right  to  reasons  is  an indispensable  part  of a sound system of  judicial  review. Under our Constitution an administrative decision is subject to judicial review if it affects the right of a citizen,  it is therefore desirable that reasons should be stated.      There   are  however,  many  areas  of   administrative activity  where no reasons are recorded or communicated,  if such a decision is challenged before the Court for  judicial review,  the reasons for the decision may be  placed  before the  court.  The superior authority  while  considering  the representation  of  a  Government  servant  against  adverse remarks,  is  not required by law to act judicially,  it  is under  no legal obligation to record or communicate  reasons for  its decision to the Government  servant. The  decision, rejecting the representation does                                                        460 not  adversely  affect any vested right  of  the  Government servant  nor does it visit him with any civil  consequences.

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In  many  cases  having regard  to  infinite  variations  of circumstances,  it may not be possible to  disclose  reasons for  the  opinion  formed  about the  work  and  conduct  or character  of  the Government servant. In the  instant  case adverse  remarks  as  contained in item Nos.  1  to  4  were expunged  but  those  at serial numbers 5  and  6  were  not expunged and the respondent’s representation to that  extent was  rejected. On a careful scrutiny of the two remarks,  it would appear that observation contained in Item No. 5  "that nothing adverse has come to notice regarding your integrity" is  not adverse to the respondent’s work and conduct.  These remarks  are  neutral in nature, and they do  not  adversely comment  upon the respondent’s work, conduct  or  character, though  they are no commendatory in nature. As  regards  the remarks  at Serial No. 6, they are  self-explanatory,  which show   that  inspite  of  oral  and  written  warnings   the respondent  the respondent did not improve. If the  superior authority  was  not satisfied with the  explanation  of  the respondent as cantained in his representation, what  reasons could be stated, except that the authority was not satisfied with the explanation. The superior authority was not obliged to  write  detail  judgment or order giving  detais  of  the warnings or the material on which he formed opinion.      There   is  no  dispute  that  there  is  no  rule   or administrative  order for recording reasons in  rejecting  a representation.  In  the absence of any  statutory  rule  or statutory instructions requiring  the competent authority to record  reasons  in  rejecting a representation  made  by  a Government   servant  against  the   adverse   entries   the competent  authority is not under any obligation  to  record reason.  But the competent  authority has no licence to  act arbitrarily,  he must act in a fair and just manner.  He  is required to consider the questions raised by the  Government servant  and examine the same, in the light of the  comments made  by  the office awarding the adverse  entries  and  the officer  counter-signing the same. If the representation  is rejected after its consideration in a fair and just  manner, the order of rejection would not be rendered illegal  merely on  the ground of absence of reasons. In the absence of  any statutory   or   administrative  provision   requiring   the competent  authority  to record reasons  or  to  communicate reasons,  no exception can be taken to the  order  rejecting representation  merely on the ground of absence of  reasons. No  order of an administrative authority  communicating  its decision  is  rendered illegal on the ground of  absence  of reasons  ex  facie  and  it is not  open  to  the  court  to interfere  with such orders merely on the ground of  absence of  any  reasons.  However,  it  does  not  mean  that   the administrative authority                                                        461 is at liberty to pass orders without there being any reasons for  the same. In governmental functioning before any  order is  issued  the matter is generally  considered  at  various levels  and  the reasons and opinions are contained  in  the notes on the file. The reasons contained in the file  enable the  competent  authority to formulate its opinion.  If  the order  as communicated to the Government  servant  rejecting the  representation does not contain any reasons, the  order cannot  be  held  to  be bad in law. If  such  an  order  is challenged  in  a  court of law it is  always  open  to  the competent  authority to place the reasons before  the  Court which  may have led to the rejection of the  representation. it is always open to an administrative authority to  produce evidence alinude  before the court to justify its action.      The President was under no  legal obligation to  record

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reasons in rejecting the respondent’s representation against the   adverse  remarks.  Consequently,  the  order  of   the president   was   not   vitiated   in   law.   The   Central Administrative  Tribunal  committed error  in  quashing  the order of the president as well as the order of the  Ministry of  Commerce  dated 6.1.1986. Assuming that there  was  some defect   in   the   order   rejecting   the    respondent’s representation,  the Tribunal was not justified  in  holding that the adverse entries awarded to the respondent should be treated as having been expunged.      We accordingly allow the appeal, set aside the order of the  Tribunal dated 27.7.1987. There will be no order as  to costs. T.N.A                                        Appeal allowed.                                                        462