ADMINISTRATIVE LAW

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"Judicial Review of Administrative Action" *
by Justice Syed Shah Mohammed Quadri

Cite as : (2001) 6 SCC (Jour) 1

I thank the organisers of today's seminar, particularly, the learned Chief Justice who prompted me to give inaugural address of today's seminar. Indeed, quite sometime has passed when I was working as a Judge in the High Court of Andhra Pradesh, I felt the necessity of arranging a seminar of this nature as I was noticing that many administrative decisions taken by the Government were being struck down either on avoidable grounds of illegality or procedural irregularity or some other grounds which could have been validly averted. I am very happy that such a seminar is organised. Those who are responsible for taking steps in shaping and finalising legislations and making administrative decisions, may not be unfamiliar with the requirement of the constitutional or administrative law, but having regard to the nature of their duties and pressure of work, it is difficult, if not impossible to keep pace with the development of law in these branches. Such seminars afford a good chance to refresh one's own knowledge and to benefit from the learning of others in the process of deliberations. This would undoubtedly result in not only saving the labour and the efforts put in the legislative measures and administrative decisions by bringing them in conformity with the requirements of the Constitution and the laws of the land but also in improving their quality.

The essential difference between a Government of despots and a Government of democratically elected persons is that in the former case, there are no limitations on the powers or their exercise whereas in the latter case, the powers are defined and their exercise is regulated by law. In a democratic country like ours, governed by the rule of law, the principle is, "be thou so high the law is above you".

In 1610, in Dr Bonham case1 when Lord Chief Justice Coke of England declared an Act of Parliament which had put its seal on the Charter of Royal College of Physics as void, he gave effect to the principle that an interested person being a beneficiary, cannot be a prosecutor and a judge at the same time. Royal College was a society in whose favour the Royal Charter was given. Under the Charter the society was authorised to impose fine on the member - violator of the bye-laws/rules of the society. In the fine imposed and collected by the society from such a member it had one-half share. Dr Bonham who was fined by the society for violation of its rules and was imprisoned for non-payment of fine, challenged the validity of the action of the society. Chief Justice Coke declared the Act as void, the impugned action illegal and ordered his release. This case may be said to be the beginning of the principle of judicial review of the legislation. It may be noticed here that after the English revolution of 1688, supremacy of Parliament became the hallmark of the unwritten Constitution of the U.K. Perhaps, for that reason, the doctrine of judicial review of parliamentary legislation did not develop in the U.K. for over a century. However, with reference to legislation of colonies, this principle was applied and in that context, the English courts developed it later. In countries having a written Constitution, the position is somewhat different. The principle of judicial review gained firm ground in the U.S.A. in the beginning of the 19th century. Though the doctrine of separation of powers is incorporated in the Constitution of the United States, there is, however, no conferment of express power of judicial review of legislation by the Congress on the Supreme Court of the United States. That principle was ingrained by Chief Justice Marshall of the Supreme Court of the United States in the famous case of Marbury v. Madison2 holding:

"Certainly, all those who have framed written Constitutions contemplate them as forming the fundamental and paramount law of the nation, and consequently, the theory of every such Government must be, that an Act of the legislature, repugnant to the Constitution, is void. This theory is essentially attached to a written Constitution, and is, consequently, to be considered, by this Court, as one of the fundamental principles of our society."

The elections of 1800 in the U.S.A. resulted in change of the President. In February 1801, about 200 years ago Marbury, along with 41 persons, was appointed as Justice of Peace for a period of five years by the outgoing President, John Adams (they were called midnight appointees). The Senate confirmed the appointments and the warrants of appointment were signed and sealed. In March 1801, Thomas Jefferson took charge as the President of the U.S.A. At his instance, the Secretary of State, James Madison, declined to deliver the warrant of appointments to Marbury and others who sought a writ of mandamus against the Secretary from the Supreme Court for delivery of warrants. At that time, such an action was considered as an attempt to intrude and intermeddle with the prerogatives of the executive. Chief Justice Marshall, nevertheless, held that the Act establishing the judicial courts of the United States conferring authority on the Supreme Court to issue writ of mandamus, inter alia, to public officers in its original jurisdiction which was not warranted under the Constitution, was void. Thereafter, the principle of judicial review was firmly established in the American jurisprudence. President Charles Evan Hughes in his speech aptly remarked, "We are under a Constitution but the Constitution is what the Judges say it is."

The principle of judicial review became an essential feature of written Constitutions of many countries. In Australia, judicial review is regulated by the Australian Administrative Procedures (Judicial Review) Act, 1977. Seervai in his book Constitutional Law of India noted that the principle of judicial review is a familiar feature of the Constitutions of Canada, Australia and India. And it may be added here that the principle of judicial review has been held to be a basic feature of our Constitution. It is incorporated in Articles 226 and 227 of the Constitution insofar as the High Courts are concerned. In regard to the Supreme Court Articles 32 and 136 of the Constitution embody the principle of judicial review. Article 32 is included in Part III as a fundamental right for enforcement of any of the fundamental rights conferred under Part III. Under our Constitution, judicial review can conveniently be classified under three heads:

(1) Judicial review of constitutional amendments.—This has been the subject-matter of consideration in various cases by the Supreme Court; of them worth mentioning are: Shankari Prasad case3, Sajjan Singh case4, Golak Nath case5, Kesavananda Bharati case6, Minerva Mills case7, Sanjeev Coke case8 and Indira Gandhi case9; the test of validity of constitutional amendments is conforming to the basic features of the Constitution.

(2) Judicial review of legislation of Parliament, State Legislatures as well as subordinate legislation.—Judicial review in this category is in respect of legislative competence and violation of fundamental rights or any other constitutional or legislative limitations;

(3) Judicial review of administrative action of the Union of India as well as the State Governments and authorities falling within the meaning of State.

Today's topic of the seminar falls under the third category.

Having said about its origin and development, it may be useful to spell out here its content and operation viz. the grounds which vitiate an administrative action. It may be stated at the outset that the object of the judicial review is to demarcate the boundaries of power of Parliament, the State Legislatures and the executive actions of the Union and the States under law and also to ensure observance of procedural safeguards. It is not exercised to scuttle the authority of the legislature in the larger sense (which includes Parliament) or the executive. The courts interpret the Constitution, relevant statutes, rules or bye-laws, define the scope of power thereunder and determine whether the impugned action is intra vires or ultra vires the authority and examine as to how the power has been exercised. In exercise of judicial review of administrative action there can be no doubt that the executive power of the Union of India under Article 73 of the Constitution extends to all matters which are within its legislative competence (List I and List III of the Seventh Schedule); so also the executive power of the State under Article 162 of the Constitution extends to all matters in respect of which it is competent to legislate (List II and List III of the Seventh Schedule of the Constitution).

It must be remembered that the power of judicial review is available to the superior courts in respect of matters falling within the realm of public law and not in respect of matters of private law. What matters fall within the purview of public law and what matters fall within the purview of private law is a moot question which needs to be debated in the seminar. The following example may give some indication on this aspect; the action of awarding contract by a public authority falls within the purview of public law but the terms of contract regarding rates, time specified for completion of work and other similar condition in the contract between public authority and the private individual as also the quantum of damages for breach of the contract, all fall within the purview of private law in respect of which no judicial review will be permissible. Thus, grant of licences, imposition of fees, classification of land, rules relating to dealership of essential commodities, etc. which fall within the domain of public law, can be the subject-matter of judicial review.

Judicial review should not be mistaken for the appeal. The right of appeal is a statutory right which can be invoked when it is so provided in the relevant Act whereas the right to seek judicial review is available even when there is a finality clause or ouster clause in an Act that the order passed by an authority thereunder is final and shall not be questioned in a court of law or that the civil court has no jurisdiction to entertain a suit in respect of any matter required to be dealt with by the authority under the Act. In the face of such a provision in any Act, an ordinary civil court has no jurisdiction to entertain a suit for adjudication of any question arising under such an Act but the extraordinary jurisdiction of the High Courts and the Supreme Court, conferred by the Constitution, is not barred. Chandra Kumar case10 is a glaring example.

One important aspect to be borne in mind is that in judicial review the courts are mainly concerned with the competence of the authority and the mode in which the authority takes the decision and not the decision taken by the authority. They are not concerned with the merits of the decision. The courts do not substitute their opinion or decision in place of the impugned decision of the authority but in appeal the appellate court does have the power to consider the merits of the case and substitute its own decision for that of the subordinate court or tribunal. It is profitable to be apprised of the words of Lord Hailsham L.C., in the case of Chief Constable of N.W.11 All ER at p. 143:

"Judicial review is concerned not with decision but with decision-making process. Unless that restriction on the power of court is observed, the court will under the guise of preventing the abuse of power, be itself guilty of usurping power."

Judicial review of administrative action may relate to either a non-statutory administrative action or a statutory administrative action. In both these cases violation of constitutional provisions like Articles 14, 19, 29, 30, 301, 304 etc., or any statutory provision will invalidate the administrative decision. We may in this connection be benefited by judgments of our Supreme Court in Ajay Hasia case12, Royappa case13 and Maneka Gandhi case14. Judicial review of administrative action, observed Lord Diplock in Council of Civil Service Union15:

"... one can conveniently clarify under three heads the grounds upon which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropriety'. That is not to say that further development on a case-by-case basis may not in course of time add further grounds." Going by this classification, insofar as the illegality is concerned, errors of law which vitiate the ultimate decision are open to judicial review.

In Pearlman v. Governors of Harrow School16 Lord Denning, M.R. observed:

"no court or tribunal has any jurisdiction to make an error of law on which the decision of the case depends. If it makes such an error it goes outside its jurisdiction".

Errors of law apparent on the face of the record render the decision ultra vires. In Anisminic Ltd. v. Foreign Compensation Commission17 that is what the House of Lords had held. There the Compensation Commission established under the Act had the power to distribute the compensation fund to British companies which suffered loss as a result of their property being sequestrated (forfeited) by the Egyptian Government. The claim of Anisminic Ltd. was rejected by the Commission as their property was sold to a third party by the Egyptian Government. The Company could not bring enough material to establish the loss suffered by it and the Board held that it had no power to grant compensation to it. There was an ouster clause in the Act to the effect that the decision of determination by the Board shall not be called in question in any court of law. Notwithstanding such an ouster clause, the House of Lords held the decision of the Board to be ultra vires as it was so wrong in law that it amounted not to be a decision at all.

Ultra vires is a facet of illegality. It means beyond the power. When used with reference to legislation it implies lack of legislative competence. If used with regard to an administrative action it indicates that it is outside the power conferred upon the authority. In Laker Airways case18 it was granted licence by the Civil Aviation Authority under the relevant Act. Subsequently, the policy of the Government changed and the British Airways was given monopoly. Consequently the licence of Laker Airways was revoked. That was found to be ultra vires, inasmuch as the subsequent policy decision was inconsistent with the provisions of the Act which remained unamended. In this category falls McCarthy case also where the County Council charged fee for consultation before giving application for allotment of flats which was held to be ultra vires. Real Food Products case19 also falls in this category. In that case the Government issued direction under Section 78-A of the Electricity Supply Act to fix concessional tariff of some fixed amount. It was held by our Supreme Court that fixation of a particular rate was beyond power to give direction under Section 78-A of the Act.

Under the head "irrationality" fall cases of exercise of discretionary power where the power is exercised for an irrelevant consideration or for improper purpose or on the dictate of a superior. An example of action based on irrelevant consideration, is termination of the services of an air hostess on her becoming pregnant (Air India v. Nargesh Mirza20). The termination of services was held to be irrational and ultra vires.

Under procedural impropriety various refinements of the principle of audi alteram partem can be grouped: (i) breach of the principle of natural justice; and (ii) not affording a fair and reasonable opportunity to meet the case. This is yet another topic which needs to be discussed in depth in this seminar. The dictate of law is that every administrative action must be reasonable. The principle of reasonableness has been laid down neatly in Wednesbury Corpn. case21 which is thenceforth referred to as the Wednesbury principle. It has three elements: (i) the authority should take all relevant facts into consideration; (ii) it should exclude all irrelevant facts from consideration; and (iii) the decision should neither be perverse nor irrational. "Perverse", of course, means improper or contradictory but in the context it symbolizes a decision not supported by any evidence and "irrational" means absurd or illogical - a decision which no person properly advised on the facts would come to.

In recent years a new ground came to be recognised as sufficient to vitiate a decision and that is the principle of proportionality. This ground found its way from the German law and gained ground in the European Community. It is being applied universally for examining the validity of administrative action. In essence, what it means is that the action complained of should not be grossly disproportionate to the gravity of the situation or offence and that excessive force should not be applied to achieve a given end. To bring home this ground, it has to be shown that the decision is unreasonably disproportionate. Section 11-A of the Industrial Disputes Act incorporates to some extent this principle. The cases of dismissal of employees on minor violation, for example, dismissal of a conductor for not issuing the ticket to the passenger etc. would fall under this ground. In India proportionality is rather treated as a facet of Article 14 that is why in Bhagat Ram case22 the Supreme Court held that penalty imposed must be commensurate with the gravity of the misconduct and that any penalty disproportionate to the gravity of the misconduct would be violative of Article 14 of the Constitution.

It may be noted that every administrative decision must be supported by valid reasons. A decision without reasons is vulnerable to be struck down as being without application of mind and arbitrary. Reasons once given cannot be altered and/or supplemented. Validity of the decision stands or falls by the reasons given at the time of passing the order. This principle is laid down by the Supreme Court in Mohinder Singh Gill case23. The oft-quoted observation of Krishna Iyer, J. that orders like old wines do not become good with the passage of time.

Arbitrariness and discrimination are but different forms of irrationality besides being vitiating factors under Article 14 of the Constitution as laid down by Bhagwati, J. in the case of Airport Authority24 and Ajay Hasia11 .

An administrative action must be free from mala fides. A heavy burden lies on the person who alleges mala fides. It is useful to notice that mala fides in the meaning of malice is of two kinds viz. malice in fact like personal ill-will, corrupt motive as in the case of Pratap Singh Kairon25 where a doctor was removed on account of personal vendetta of Pratap Singh Kairon who was then the Chief Minister of Punjab. The second is malice in law; where power is exercised for a purpose other than the one for which it is conferred or on an irrelevant ground e.g. awarding of contract or making an appointment not on the merit of the case but for the reason that the awardee has good connections with certain organisation or parties. Due to paucity of time I am leaving out two relevant aspects - legitimate expectation and promissory estoppel, which I hope, will be adverted to in the deliberations of the seminar.

With these introductory remarks I inaugurate the seminar today. I hope and wish the seminar a great success in that it achieves the object for which it is arranged - viz. understanding the legal aspects of administrative decisions for rendering administrative justice to best serve the people at large, keeping in view the constitutional objective of providing justice to the people of India at the hands of the executive as well. If proper care is taken at the level of making administrative decisions, there will be little scope for grievance and invoking courts' jurisdiction. This will not only reduce the burden on courts but will also create a sense of security and satisfaction in people which is the essence of good governance and foundation of a welfare State.

*   Inaugural speech delivered at the seminar on March 3, 2001 at Hyderabad Return to Text

1. (1610) 8 Co Rep 113 b : 77 ER 646 Return to Text
2. 1 Cranch 137 : 2 L Ed 60 (1803) Return to Text
3. Shankari Prasad Singh Deo v. Union of India, AIR 1951 SC 458 Return to Text
4. Sajjan Singh v. State of Rajasthan, AIR 1965 SC 845 Return to Text
5. Golak Nath v. State of Punjab, AIR 1967 SC 1643 Return to Text
6. Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225 Return to Text
7. Minerva Mills Ltd. v. Union of India, (1980) 3 SCC 625 Return to Text
8. Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd., (1983) 1 SCC 147 Return to Text
9. Indira Nehru Gandhi v. Raj Narain, 1975 Supp SCC 1 Return to Text
10. Chandrakumar v. Union of India, (1997) 3 SCC 261 Return to Text
11. Chief Constable of North Wales Police v. Evans, (1982) 3 All ER 141 Return to Text
12. Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 Return to Text
13. E.P. Royappa v. State of T.N., (1974) 4 SCC 3 Return to Text
14. Maneka Gandhi v. Union of India, (1978) 1 SCC 248 Return to Text
15. Council of Civil Service Unions v. Minister for the Civil Service, (1984) 3 WLR 1174 : (1984) 3 All ER 935 (HL) Return to Text
16. 1979 QB 56 : (1979) 1 All ER 365 (CA) Return to Text
17. (1969) 2 AC 147 : (1969) 1 All ER 208 (HL) Return to Text
18. Laker Airways Ltd. v. Deptt. of Trade, 1977 QB 643 Return to Text
19. Real Food Products Ltd. v. A.P. SEB, (1995) 3 SCC 295 Return to Text
20. (1981) 4 SCC 335 Return to Text
21. Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1947) 2 All ER 680 : (1948) 1 KB 223 Return to Text
22. Bhagat Ram v. State of Punjab, (1972) 2 SCC 170 Return to Text
23. Mohinder Singh Gill v. Chief Election Commr., (1978) 1 SCC 405 Return to Text
24. Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489 Return to Text
25. Pratap Singh v. State of Punjab, AIR 1964 SC 72 : (1964) 4 SCR 733 Return to Text