Natural Justice _Notes

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Natural Justice _Notes

  1. 1. PrinciplesofNaturalJusticeAssignment Topic OnBusiness LawPresented ByAlexander T C ,IInd SemesterMBA Evening Batch2010-2012
  2. 2. Assignment on Business Laws - Principles of Natural Justice Presented By Alexander T C MBA 2nd Semester IMK –UoK1. Introduction :- Why Application of Principles of Natural Justice in Managerial Decisions is important? Most Managerial decisions that affect individuals and organisations are made by primary decision makers i.e. front-line administrators and managers. Only a minority of these decisions are reviewed by internal review officers, ombudsmen, courts or tribunals. The quality of administrative justice experienced by the public depends largely on primary decision makers ‘getting it right’. Central to good decision making is decision makers’ understanding of the legal and administrative framework in which decisions should be made. In turn, this depends on whether primary decision makers have adequate knowledge of that framework. While taking a decision a manager has to have the following in his mind to have his decision justified.  Procedural Fairness  Lawfulness  Evidence, Facts And Findings  Reasons  Accountability2. Definition:- Justice is of two types namely Legal Justice and Natural Justice. Legal justice refers to justice governed by the law of the state and natural Justice refers to moral justice and is governed by the Laws of Equity. Justice done to one seems not injustice to another. So the goodness of a law is in maximizing the pleasure of the beneficiaries with minimized pain to the others. According to Aristotle, law inspired by reason is the natural law and when ever the general preposition of legal law is found to work hardship to a particular case, equity must be applied to mitigate (make less severe or painful) and rectify the harshness. It’s the natural law that provides the frame work of principles and it is left to the legal law to supply flesh and blood to the legal system. “The Principles of Natural Justice are easy to proclaim, but their precise extent is far less easy to define” . No precise definition is possible for Natural Justice. The word ‘Natural Justice’ is derived from the Roman word ‘Jus Naturale’, which means principles of natural law, justice, equity, and good conscience. Natural Justice is not something derived from Laws of nature. Laws of nature promote the survival rather than justice. Therefore, ‘natural’ justice is not justice found in nature; it is a compendium (collection) of concepts which must be naturally associated with justice, whether these concepts are incorporated in law or not. Natural Justice is also known as substantial justice, fundamental justice, universal justice orfair play in action. Rules of natural justice are the minimum standards of fair decision-makingimposed on persons or bodies acting in a judicial capacity. Rules of natural justice are not rulesembodied in any statute3. Features:  An important concept in administrative law.  Fundamental rules of justice, breach of which will prevent justice being seen done. 2
  3. 3. Assignment on Business Laws - Principles of Natural Justice Presented By Alexander T C MBA 2nd Semester IMK –UoK  It’s a great humanising principle intended to invest law with fairness, to secure justice and prevent miscarriage of justice.  Implied mandatory requirement, non observance of which invalidates the exercise of power.  It will always apply , however silent a statue may be 4. Doctrine of Natural Justice – Is it Mandatory? In strict sense where there is a valid law, principles of natural justice is not applicable. These rules can operate only in areas not covered by any law validly made, in other words, Rules of Natural Laws do not supplant law, but supplement it. (A.K. Kraipak Vs. Union of India (AIR 1970 SC 150)) Rules of Natural Justice are procedural in nature and are applied where an authority takes a decision which involves civil rights of individual(s). Earlier the rules of Natural Justice were binding only to judicial and quasi judicial bodies (Kishan Chand V. Commissioner of Police - 1961 3SCR-165) but later on SC of India held that even an administrative order which involves civil consequences must be made consistently with rules of natural justice. In Maneka Gandhi V Union of India (A I R 1978) SC held that the Rules of Natural Justice are applicable to judicial, Quasi Judicial and Administrative authorities. Rules of natural justice are flexible in nature and can change with the exigencies of time, and circumstances of each case. The rules of fairness or natural justice were not rigid but depended on their context. The extent of application of rules of Natural justice can not have a rigid formula and will depend on the 1. Nature of Jurisdiction conferred on the administrative authority 2. Character of the rights of the person s affected 3. Scheme and Policy of the Statue applicable. 4. Other relevant circumstance of the case. 5. Essential Ingredients of Natural Justice:- The essential ingredients of Natural Justice are the following1 Rule Against Bias A person will not judge a case in which he is himself interested2 Right To Be Heard No one should be condemned unheard3 Reasoned Decisions An order passed must be a speaking order, supported by reasons I.Rules Against Bias:- This rule originates from the Latin Maxim nemo judex in causa sua” which means that a person will not judge a case in which he is himself interested. The fundamental principle of justice is that justice should not only be done but undoubtedly be seen to be done. To serve this purpose it is necessary that a person who decides on matter should not have any substantial interest either in the subject matter to the parties in dispute. In short this rule states the first requirement of Natural Justice that the judge must be impartial and neutral and must be free from bias. Some instances where this rule can be applied are given below. 3
  4. 4. Assignment on Business Laws - Principles of Natural Justice Presented By Alexander T C MBA 2nd Semester IMK –UoK Pecuniary Bias arises from monetary interest in the subject 1 Pecuniary Bias matter Personal Bias arise from friendship , personal or 2 Personal Bias professional relationship, personal hostility, personal prejudices 3 Judge witness combination Person acts in double role as judge and witness 4 Judge Prosecutor combination Person framing the charges act as the enquiry officer Judge Prosecutor & witness Single person can not be a complainant –witness 5 combination ,Prosecutor and Judge 6 Judge ones own case A person can not sit as judge in his on cause An extra ordinary interest shown by the judge on the 7 Bias relating to subject matter subject matter A person who made a prior statement on the subject matter 8 Pre judgement of issues can not be a judge on disputes on the same subject matter. A person to decide on the subject matter acts upon the 9 Acting under dictation dictation from the superior. Test of Bias: A question of bias can be tested by applying the following tests. a) Test of real likelihood b) Test of reasonable suspicion These tests are done in combination by courts in India. A question of bias is decided by the court on the ground that whether a reasonable man could suspect bias in the given circumstances. Waiver of right to question bias:- An allegation of bias if not raised at the proper time, theright to object will be lost by principle of waiver,. Where fear or ignorance can be proved, principleof waiver may not apply. II. Right to be Heard:- The rule has its origin in the Latin Maxim ‘Audi alteram partem” which means ‘Hear the other party”. According to this rule any person whose rights or interest is being affected should be given reasonable opportunity to defend him. Natural Justice requires that the person who is likely to be affected by the decision must be heard before a decision is given. The hearing may be oral or it can be through a written representation. This, in turn entails that such a person must be informed about the nature of the enquiry and if any charges have been framed against him, of the charges. The ingredients of fair hearing are as follows. Reasonably prior Notice to be issued with time place and nature of hearing. No Reasonable specific statutory requirement of notice in India. Depending on factual situations 1 Notice adequacy of notice can be decided. If party does not respond, can proceed “ex parte” 4
  5. 5. Assignment on Business Laws - Principles of Natural Justice Presented By Alexander T C MBA 2nd Semester IMK –UoK Conduct of Not to condemn with out hearing. Hearing can be Oral or Written depending upon 2 Hearing the facts of each case. Right to It gives the right to produce evidence in one’s favour. But the authority can decide 3 adduce whether evidence produced is material & relevant or not. . But can not use evidence coercive process to bring evidence. Where an adjudicating authority relay on some material against adpersons, such Disclosure of 4 material must be shown to the person stoat he can explain, criticise or rebut the Evidence evidence. General principle is that taking evidence from witness or relying ex parte Absence of 5 statements in the absence of party is violation of Natural justice. Not applicable in other party extra ordinary circumstances. E.g. Sexual Harassment by teacher Cross Right to cross examine the witness where oral evidence is given. If the hearing is 6 examination oral and enquiry is mere fact finding in nature, cross examination be avoided. Right to legal aid is a fundamental right. But where appearance of legal Right to legal practitioners is explicitly avoided, person has to defend his own case. But even if 7 Representati right o legal representation is denied in a statue, in can be allowed in special on cases. E.g. where an Employer having legal department to proceed an enquiry against worker , worker has the right to be represented through an advocate One who A judicial proceeding adheres to the rule strictly. But in Administrative adjudication 8 decides must one person hers and another decides and such decisions are called Institutional hear decisions. Exceptions to the Rule of Right to be Heard:- The exceptions to the rule of fair hearing as recognised by courts are as follows. a) Public Interest: - Where defence and state secrets are involved. In certain cases post decisional hearing has been held relevant. b) Emergency: Urgency is pleaded as an excuse for not complying the principles of Natural Justice. In such cases also Post Decisional hearing is approved as good substitute. c) Impracticability: In extreme situations it may highly impracticable to comply the rules. In Rahda Krishna V. Osmaina University (AIR 1974) the decision of the university cancelling the entire MBA examination on the reason of mass copying with out hearing students held valid. d) Legislative Sections:- In Supreme and Subordinate legislative sections, rules of natural justice cant be applied. e) Statutory Exclusions: There can be provisions expressly negating natural justice but such exclusion if found arbitrary , unreasonable and unfair courts may quash it giving wider importance to Article 14(Equality before law) and Article 21 (No person shall be deprived of his life and property except according to procedure established by law) of Constitution of India . 5
  6. 6. Assignment on Business Laws - Principles of Natural Justice Presented By Alexander T C MBA 2nd Semester IMK –UoK III. Reasoned Decisions:- The doctrine of reasoned decisions was not considered a part of Natural Justice and adjudicatory bodies were not obliged to give reasons for their decisions. In UK legal provisions made to this effect in Tribunals and Inquiries Act 1971 and in USA Administrative Procedure Act under Sec 8B it is stipulated that administrative decisions must be accompanied by findings and conclusions as well as reasons upon all material issues of law, facts or discretion. In India there is no such statutory requirement of giving reasons. In Maneka Gandhi V Union of India (A I R 1978) SC held that giving reasons is a healthy check against abuse or misuse of power. An order passed by an enquiry officer or administrative agency must be a speaking order. If the order is not supported by reasons, it will amount to violation of the rules of natural justice. When a higher authority reverses the order of lower authority, reasons must be clearly stated But when appellate authority affirms and order, need to state reasons.6. Duty To Act Fairly: - The Decision in Kraipak V. Union of India AIR 1970) by Supreme Court of India established the principle that duty to act fairly lies on any authority whether administrative or Quasi Judicial. The duty to act fairly may not cover all principles of natural justice but it imposes an obligation on the authority to be fair. The question whether an authority had acted fairly or not will depend on the circumstances of the case.7. Validity of an order on failure to observe natural justice:- Failure to observe the principles of natural justice will make a decision null & void abinitio. A quasi Judicial or Administrative decision made in violation of the principles of natural justice wherever in can be read as an implied requirement of law is null and void. (Swedeshi Cotton Mills v. Union of India (1981) 1 SCC)8. Case Laws:- a) TVS Finance and Service Limited vs H. Shiva Kumar [SUPREME COURT OF INDIA, 01 Oct 2010]Labour & Industrial Law - Practice & Procedure - Violation of principles of natural justice :- Single Judge Directive the appellants to pay to the respondent 50 per cent of the last drawn salary as interim measure. Appellate Bench while partly allowing the appeal filed by the respondent against order had modified the said order to the effect that the interim relief to the respondent would be payable from the date of his application before the Labour Court. Question before the SC was whether impugned order deserved to be set aside on the ground that the order passed by the Single Judge was modified to the detriment of the appellant without notice to them? Allowing the appeal SC Held that impugned order could not be sustained as the same was passed in clear violation of the principles of natural justice. Given an opportunity, the appellants might have explained that the directions issued by the Single Judge were fully justified and did not require any variation .There were no exceptional circumstances in the case warranting non-compliance with the cardinal rule of Audi alterant partetn and therefore, the impugned order deserved to be quashed - Appeal allowed. a. S. B. I. vs Hemant Kumar [SUPREME COURT OF INDIA, 06 Apr 2011] Labour & Industrial Law - Domestic enquiry - Violation of principles of natural justice:- 6
  7. 7. Assignment on Business Laws - Principles of Natural Justice Presented By Alexander T C MBA 2nd Semester IMK –UoK Respondent Cashier-cum-Clerk allegedly misappropriated cash from appellant bank - Respondent was charge-sheeted and enquiry proceedings were initiated - Since respondent was absent on various dates of hearing, enquiry officer passed ex parte order holding that respondent was guilty of charges - Respondents departmental appeal was dismissed - Respondent raised an industrial dispute - Industrial Tribunal directed reinstatement of respondent holding that departmental enquiry suffered from violation of principles of natural justice - HC upheld Tribunal order in appellants writ petition – SC examined Whether there was any violation of principles of natural justice in instant case - Held, principles of natural justice should not be stretched to a point where they would render in-house proceedings unworkable . Respondent had not appeared for enquiry on two earlier dates and he was absent on third appointment day also. Respondent adopted dilatory tactics and in-house proceedings should be conducted expeditiously and without any undue loss of time. Tribunals observation that three barren dates in an in-house proceeding did not amount to delay, was unfortunate. Further, respondent had already tendered two admissions of guilt in writing and one orally before management witness and there was hardly anything that could be said on his behalf to repel charges - Tribunals findings, therefore, were wholly unreasonable and perverse and HC, unfortunately, did not consider matter properly - Hence, impugned Tribunal and HC orders were set aside - Appeal allowed. 9. Administrative Fairness Guidelines 1. Proper authority to decide: - What legislation created the authority or power (direct or delegated ) to make a decision and to which decision-maker was the power granted? 2. Duty of fairness in procedure: - The decision-making which affects the rights of individuals must follow a fair process. This duty of fairness means there must be procedural fairness in decision-making. 3. Participation rights:- Was the complainant given a full and fair opportunity to present their case to the decision-maker? Was there full disclosure of the case against the person, to the person? 4. Adequate reasons:- There must be a rational connection between the evidence presented and the conclusions reached by the decision-maker. The decision and the reasons must be communicated clearly and identified by the decision-maker. 5. Reasonable apprehension of bias:- We look for impartiality and independence of the decision-maker including relationships to all parties in the matter, both internally and externally. 6. Legitimate expectation:- Did the decision-maker fail to honour a commitment or follow regular procedures? 7. Exercising discretionary power:- We look to see how the discretion is established in the Act, Regulation, or Policy Guidelines, etc. Discretionary decisions are reviewed to determine if there is evidence of bad faith, improper purpose, or irrelevant considerations. 8. Was the decision reasonable? A reasonable decision does not equate to whether the decision is wrong or whether it might have been decided in a different way. A reasonable decision should indicate how the decision-maker(s) considered and assessed the arguments and evidence. These eight fairness factors form the nucleus of a procedural guide to a manager whendetermining if natural justice and administrative fairness prevailed in coming to a decision. 7

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