judgement:
Appeals Nos.
2596 and 2597 of 1966.
Appeals by special leave from the Orders dated May 2, 1966 and June 22, 1966 of the Government of India, Ministry of Mines and Metals, New Delhi on application is filed by the appellant under Rule 54 of the Mineral Concession Rules, 1960.
section J. Sorabji, A. J. Rana, J. R. Gagrat and B. R. Agarwal, or the appellant (in both the appeals).
G. N. Dikshit, R. N. Sachthey for section P. Nayyar, for respondent No. 1 (in both the appeals).
P. Ram Reddy and B. Parthasarathy, for respondent No. 2 (in both the appeals).
M. C. Setalvad, B. Dutta, and O. C. Mathur, for respondent No. 3 (in both the appeals).
The Judgment of the Court was delivered by Mitter, J.
These two appeals by special leave, are Iimited to the question as to whether in dismissing a revision and confirming the order of the State of Andhra Pradesh, the Union of India was bound to make a speaking order.
The text of the order is the same in both the cases, the only difference being in 304 the situs and the area in respect of which the lease was applied for.
One of the orders runs as follows "New Delhi, the 22nd June, 1966".
I am directed to refer to your revision application dated 14 12 1964 and letter dated 28 1 1966 on the above subject and to say that after careful consideration of the grounds stated therein, the Central Government have come to the conclusion that there is no valid ground for interfering with the decision of the Government of Andhra Pradesh rejecting your application for grant of mining lease for asbestos over an area of Ac.1 13 50 in Brahmanapalii village, Cuddapah District, Andhra Pradesh.
Your application for revision is, therefore, rejected.
" The facts leading to the two appeals are as follows : In response to a notification dated January 8, 1964 published in the State Gazette by the Andhra Pradesh Government inviting applications under r. 58 of the rules framed under the (hereinafter referred to as the Rules and the Act) the appellant submitted two applications in the prescribed form viz., Form "I" for areas aggregating Ac.
113 50 in village Brahmanapalli and Ac.
13 10 in village Ippatta both in the district of Cuddapah for mining asbestos.
Respondent No. 3 also made similar applications on the same date.
According to the appellant his applications complied with all the requirements of Form "I" while those of respondent No. 3 were defective in some respects.
Besides the appellant and the respondent No. 3, there was only one other person who applied for a prospecting licence which was rejected off hand.
As between the appellant and the respondent No. 3, the Government of Andhra Pradesh preferred the latter.
The relevant portion of the order dated 19th October 1964 in respect of the village Brahmanapalli under section 10(3) of the Act was as follows : "As between the other applicants Sri Bhagat Raja and M/s. Tiffin 's Barytes, Asbestos and, Paints Ltd., the Government prefer M/s. Tiffin 's Barytes. as they are having adequate general experience and technical knowledge, and are old lessees in the district, without any arrears of mineral dues to the Government.
The mining lease application of Sri Bhagat Raja for the areas covered by the mining lease application of M/s. Tiffin 's Barytes, Asbestos and Paints Ltd. is rejected.
" 305 The text of the Order with regard to village Ippatta is practically the same.
The appellant filed application in revision in the prescribed form i.e. Form 'N ' under section 30 of the Act read with r. 54 to the Union of India on December 14, 1964.
The appellant tried to bring out in his revision applications that the financial condition of the 3rd respondent was extremely precarious as would be evidenced by documents, copies whereof were annexed to his petition.
The 3rd respondent filed a counter statement to the revision application in April 1965.
In March 1966 the appellant received the comments of the Andhra Pradesh Government on his revision applications.
The appellant filed rejoinder to the counter statements of the 3rd respondent in May 1965 and to the comments of the Andhra Pradesh Government in April 1966.
He also asked for the grant of a personal hearing before the decision of the case which was not given.
Ultimately, his applications were rejected by orders quoted hereinabove.
Various grounds of appeal were taken in the application for special leave to appeal preferred by the appellant.
An, attempt has been made therein to show that respondent No. 3 had no experience in asbestos mining, that its financial position was very unsatisfactory and that its application for mining lease was not in proper form.
A complaint was also made that in rejecting the applicant 's revision applications the Union of India was bound to give reasons for its decision as it was exercising quasi judicial powers under section 30 of the Act read with rr.
54 and 55, that principles of natural justice and fairplay requiring the divulgence of the grounds were violated and that a personal hearing should have been given to the appellant before the disposal of the revision applications.
We are not called upon in this case to go into the merits of the case but only to examine the question as to whether it was necessary for the Government of India to give reasons for its decision in view of the provisions of the Act and the Rules or aliunde because the decision was liable to be questioned in appeal to this Court.
It is necessary to take note of a few provisions ofthe Act and the relevant rules framed thereunder to ascertain the scope of a party 's right to, apply for a lease and the powers and duties of the Government in accepting or rejecting the some.
The preamble to the Act shows that its object was to provide for the regulation of mines and the development of minerals under the control of the Union of India.
Under section 4(1) no person can undertake any prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a prospecting licence or a mining lease granted under the Act and the Rules.
Under sub section
(2) of the section 306 "No prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules mad. , thereunder.
" S.5 lays down certain conditions which a person desiring to have a mining lease must fulfil.
section 8 provides for the period for which a mining lease may be granted.
Under section 10(1) an application for a mining lease has to be made to the State Government concerned in the prescribed form.
Sub section (3) of S.10 runs as follows : "On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the licence or lease." Under sub section
(2) of section 11 a person whose application for a licence is received earlier than those of others shall have a preferential right for the grant thereof over the others.
The proviso to this sub section enacts that where applications are received on the same day, the State Government, after taking into consideration the matters specified in sub section
(3), may grant the mining lease to such one of the applicants as it may deem fit.
Sub section
(3) specifies the matters referred to in sub section
(2) and they are as follows : (a) any special knowledge or experience in, prospecting operations or mining operations, as the case may be, possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; and (d) such other matters as may be prescribed. 'section 13(1) enables the Central Government to make rules for regulating the grant of prospecting licences and mining leases.
Under s.19 any mining lease granted, renewed or acquired in contravention of the provisions of the Act is to be void and of no effect.
Power of revision of the order of the State Government is given to the Central Government in the following terms: "The Central Government may, of its own motion or on application made within the prescribed time by the aggrieved party, revise any order made by a State Government or other authority in exercise of the powers conferred on it by or under this Act.
" Rules were made by the Central Government under s.13 of the Act known as the Mineral Concession Rules, 1960.
R.22 pres cribes that an application for the grant of a mining lease must be made to the State Government in Form "I" accompanied by a 307 fee of Rs. 200/ , a deposit of Rs. 5001 and an income tax clearance certificate.
Under r. 26 the State Government is obliged to give reasons for refusal to grant a mining lease.
Any person aggrieved by an order made by the State Government may prefer an application for revision under r. 54 in Form 'N '.
In every such application against the order of the State Government refusing to grant a mining lease, a person to whom a lease has been granted must be impleaded as a party.
R. 55 originally framed in 1960 was amended in July 1965.
Under the amended r.55 the position is as follows: "(1) On receipt of an application for revision under r. 54, copies thereof shall be sent to the State Government and to all the impleaded parties calling upon them to make such comments as they may like to make within three months of the date of issue of the communication and if no comments are received within that period, it is to be presumed that the party omitting to make such comments has none to make.
(2) On receipt of the comments from any party under Sub rule (1), copies thereof have to be, sent to the other parties calling upon them to make further comments as they may like to make within one month from the date of the issue of the communication.
(3) The revision application, the communications containing comments and counter conmments referred to in sub rules (1) and (2) shall constitute the record of the case.
(4) After considering the records referred to in sub rule (3), the Central Government may confirm, modify or set aside the order or pass such other order in relation thereto as it may deem just and proper.
" From the above, it will be amply clear that in exercising its powers of revision under r. 55 the Central Government must take into consideration not only the material which was before the State Government but comments and counter comments, if any, which the parties may make regarding the order of the State Government.
In other words, it is open to the parties to show how and where the State Government had gone wrong, or, why the order of the State Government should be confirmed.
A party whose application for a mining lease is turned down by the State Government is therefore given an opportunity of showing that the State Government had taken into consideration irrelevant matters or based its decision on grounds which were not justified.
At the time when applications for a licence are made by different parties to the State Government.
they are not L5Sup/67 7 308 given an opportunity of showing any defects or demerits in the applications of the others or why their applications should be Preferred to others.
The State Government has to make up its mind by considering the applications before it as to which party is to be preferred to the other or others.
S.11(3), as already noted, prescribes the matters which the State Government must consider before selecting one out of the numerous applicants.
But the possibility of the State Government being misled in its consideration of the matters cannot be ruled out.
It may be that a party to whom a lease is directed to be granted has in fact no special knowledge or experience requisite for the mining operations or it may be that his financial resources have not been properly disclosed.
It may also be that the nature and quality of the technical staff employed or to be employed by him is not of the requisite standard.
In an application for revision under r. 55 it will be open to an aggrieved party to contend that the matters covered by sub section
(3) of section 11 were not properly examined by the State Government, or that the State Government had not before it all the available material to make up its mind with respect thereto before grant in a licence.
In a case where complaints of this nature are made, of necessity, the Central Government has to scrutinise matters which were not canvassed before the State Government.
A question may arise in such cases as to whether the order of the Central Government in the form in which it was made in this case would be sufficient, specially in view of the fact that the correctness thereof may be tested in appeal to this Court.
It is now well settled that in exercising its powers of revision under r. 55 the Central Government discharges functions which are quasi judicial : see Shivji Nathubhai vs The Union of India & Ors.
(1) and M. P. Industries vs Union (1).
In the latter case one of us (our present Chief Justice) said (at p. 471) : "The entire scheme of the rules posits a judicial procedure and the Central Government is constituted as a tribunal to dispose of the said revision.
Indeed this Court in Shivji Nathubhai vs The Union of India (supra) rules that the Central Government exercising its power of review under r. 54 of the Mineral Concession Rules, 1949, was acting judicially as a tribunal.
The new rule, if at all, is clearer in that regard and emphasises the judicial character of the proceeding.
If it was a tribunal, this Court under article 136 of the Constitution can entertain an appeal against the order :of the Central Government made in exercise of its revisional powers under r. 55 of the Rules." (1) [1960]2 S.C.R. 775.
(2) 309 Let us now examine the question as to whether it was incum bent on the Central Government to give any reasons for its decision on review.
It was argued that the very exercise of judicial or quasi judicial powers in the case of a tribunal entailed upon it an obligation to give reasons for arriving at a decision for or against a party.
The decisions of tribunals in India are subject to the supervisory powers of the High Courts under article 227 of the Constitution and of appellate powers of this Court under article 136.
It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected", or, "dismissed".
In such a case, this Court can probably only exercise its appellate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal.
This will certainly be a very unsatisfactory method of dealing with the appeal.
Ordinarily, in a case like this, if the State Government gives sufficient reasons for accepting the application of one party and rejecting that of the others, as it must, and the Central Government adopts the reasoning of the State Government, this Court may proceed to examine whether the reasons given are sufficient for the purpose of upholding the decision.
But, when the reasons given in the order of the State Government are scrappy or nebulous and the Central Government makes no attempt to clarify the same, this Court, in appeal may have to examine the case de novo without anybody being the wiser for the review by the Central Government.
If the State Government gives a number of reasons some of which are good and some are not, and the Central Government merely endorses the order of the State Government without specifying those reasons which according to it are ,sufficient to uphold the order of the State Government, this Court, in appeal, may find it difficult to ascertain which are the grounds which weighed with the Central Government in upholding the order of the State Government.
In such circumstances, what is known as a "speaking order" is called for.
The order of the Central Government of June 22, 1966 is so worded as to be open to the construction that the reviewing authority was primarily concerned with finding out whether any grounds had been made out for interfering with the decision of the State Government.
In other words, the Central Government was not so much concerned to examine the grounds or the reasons for the decision of the State Government but to find out whether here was any cause for disturbing the same Prima facie the order does not show that the reviewing authority had any thought of expressing its own reasons for maintaining the decision arrived at.
If detailed reasons had been given by the 310 State Government and the Central Government had indicated clearly that it was accepting the reasons for the decision of the State Government, one would be in a position to say that the reasons, for the grant of a lease to a person other than the appellant were obvious.
But, where as here, the State Government does not find any fault or defect in the application of the unsuccessfully applicant and merely prefers another on the ground that "he had adequate general experience and technical knowledge and was an old lessee without any arrears of mineral dues" it is difficult to say what turned the scale in favour of the successful applicant excepting the fact that he was known to the State Government from before.
We do not want to express any views on this but if this be a proper test, then no new entrant in the field can have any chance of success where there is in old lessee competing with him.
The order of the Central Government does not bring out any reason for its own decision except that no ground for interference with the decision arrived at was established.
Now we propose to examine some decisions of this Court where the question as to whether the reviewing authority should give reasons for its decisions was gone into.
In Harinagar Sugar Mills vs Shyam Sundar Jhunjhunwala(1) this Court had to consider whether the Central Government exercising appellate powers under s.111 of the before its amendment in 1960 was a tribunal exercising judicial functions and as such, subject to the appellate jurisdiction of this Court under article 136 of the Constitution and whether the Central Government had acted in excess of its jurisdiction, or acted illegally otherwise in directing the company to register the transfer or transfers in favour of the respondents.
There, the articles of association of the company concerned gave the directors the right in their absolute discretion and without assigning any reason to refuse to register any transfer of shares.
The directors declined to register some shares in the name of the transferees who applied to the High Court at Bombay for orders under section 38 of the Indian Companies Act, 1913 for rectification of the share register on the ground that the board of directors had exercised their right mala fide, arbitrarily and capriciously.
The High Court rejected these petitions on the ground that controversial questions of law and fact could not be tried in summary proceedings under section 38.
The transferees requested the directors once more to register the shares.
On their refusal to do so, appeals were preferred to the Central Government under s.111(3) of the Indian which had since come into operation.
The Joint Secretary, Ministry of Finance, who heard the appeals declined to order registration of transfers (1)[1962] 2 S.C.R. 339 @ 357.
311 practically on grounds similar to those put forward by the High Court of Bombay.
Thereafter, the original holder of the shares transferred some shares to his son and some to his daughter in id '", and the transferees requested the company to register the transfers.
The directors once more refused.
Against the resolution of the directors, separate appeals were preferred by the son and daughter in law of the original holder of the shares.
The Deputy Secretary to the Government of India set aside the resolution passed by the board of directors and directed the company to register the transfers.
No reasons were however given for such order.
The company came up in appeal to this Court under article 136 of the Constitution.
According to the judgment of the majority of Judges, the exercise of authority by the Central Government was judicial as it had to adjudicate upon the rights of contesting parties when there was a lis between them.
It was observed in that case that "If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this court under Art 136 of the Constitution, we fail to see how the power of this court can be effectively exercised if reasons are not given by the Central Government in support of its order." This Court further held that there had been no proper the appeals, no reasons having been given in support orders of the Deputy Secretary who heard them and result, the orders were quashed with a direction that the be re heard and disposed of according to law.
In Sardar Govindrao vs State(1) the appellants who to be descendants of former ruling chiefs in same districts of Madhya Pradesh applied under the Central Provinces and Berar Revocation of Land Revenue Exemptions Act, 1948 for grant of money or pension as suitable maintenance for themselves.
They held estates in two districts on favourable terms as Jahgirdars Maufidars and Ubaridars and enjoyed, an exemption from paymnent of land revenue aggregating Rs. 27,828 5 0 per year.
On the passing of the Act, the exemption was lost and they claimed to be entitled to grant of money or pension under the provisions of the Act.
They applied to the Deputy Commissioner who forwarded their applications to the State Government.
These were rejected without any reasons being given therefor.
The appellants filed a petition in the High Court of Madhya Pradesh under article 226 of the Constitution for a writ of certiorari 'to quash the order of the State Government.
The High Court held that the State Government "was (1) [ ; 312 not compelled to grant either money or pension because the exercise of the power under section 5 was discretionary and the petition, therefore was incompetent." section 5(3) of the C.P. and Berar Act provided as follows : "The Provincial Government may make a grant of money or pension (i) for the maintenance or upkeep of any religious, charitable or public institution or service of a like nature, or (ii) for suitable maintenance of any family of a descendant from a former ruling chief.
" section 6 'barred the jurisdiction of civil courts.
It was observed by this Court .
"The Act lays down upon the Government a duty which obviously must be performed in a judicial manner.
The appellants did not seem to have been heard at all.
The Act bars a suit and there is all the more reason that Government must deal.
with such case in a quasi judicial manner giving an opportunity to the claimants to state their case in the light of the report of the Deputy Commissioner.
The appellants were also entitled to know the reason why their claim for the grant of money or pension was rejected by Government and how they were considered as not falling within the class of persons who it was clearly intended by the Act to be compensated in this manner. .
As the order of Government does not fulfil the elementary requirements of a quasijudicial process we do not consider it necessary to order a remit to the High Court.
" In the result this Court set aside the order of the Government and directed the disposal of the case in the light of the remarks made.
In M. P. Industries vs Union(1) the order of the Central Government rejecting the revision application under r. 55 of the Mineral Concession Rules was couched in exactly the same language as the order in appeal before us (see at p. 475 of the report) One cannot help feeling that the Ministry concerned have a special form which is to be used whenever a review application is to be rejected.
This may easily lead anyone to believe that the review is a sham and nothing but the formal observance of the power granted to the Central Government.
In that case, all the three learned Judges of this Court who heard the appeal were unanimous in dismissing it : some of the obser (1) [196] 1 S.C.R. 466. 313 vations made bear repetition.
It was there argued that if the Central Government had to give reasons when it functioned as a tribunals it would obstruct the work of the Government and lead to unnecessary delays.
As to this it said by our present Chief Justice : "The Central Government functions only through different officers and in this case it functioned through an Under Secretary.
The condition of giving reasons is only attached to an order made by the Government when it functions judicially as a tribunal in a comparatively small number of matters and not in regard to other administrative orders it passes.
Our Constitution posits a welfare State. .In the context of a welfare State, administrative tribunals have come to stay.
Indeed, they are the necessary concomitants of a welfare State.
But arbitrariness in their functioning destroys the concept of a welfare State it , self Self discipline and supervision exclude or at any rate minimise arbitrariness.
The least a tribunal can do is to disclose its mind.
The compulsion of disclosure guarantees consideration.
The condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds.
A reasoned order is a desirable con dition of judicial disposal.
If tribunals can make orders with out giving reasons, the said power in the hands of unscrupulous or dishonest officers may turn out to be a potent weapon for abuse of power.
But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if it discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction.
A speaking order will at its best be a reasonable and at its worst be at least a plausible one.
The public should not be deprived of this only safeguard.
" It was further observed in that case that the position of ordinary courts of law was different from that of tribunals exercising judicial functions and it was said : "A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but, an executive officer generally looks at things from the standpoint of policy and expediency.
The habit of 314 mind of an executive officer so formed cannot be expected to change from function to function or from act to act.
So it, is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affecting the rights of parties; and the least they should do is to give reasons for their orders.
Even in the case of appellate courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it.
But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons.
That apart, when we insist upon reasons; we do not prescribe any particular form or scale of the reasons.
The extent and the nature of the reasons depend upon case of affirmance where the original tribunal gives bunal shall give its own reasons succinctly; but in a case of affirmance where the original tribunal gives adequate reasons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons.
What is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by reference to those given by the original tribunal.
The nature and the elaboration of the reasons necessarily depend upon the facts of each case.
" It must be noted however that the above view was not shared by the two other Judges of the Bench constituting this Court.
It was said by them : "For the purpose of an appeal under article 136, orders of Courts and tribunals stand on the same footing.
An order of court dismissing a revision application often gives no reason, but this is not a sufficient ground for quashing it.
Likewise, an order of an ad minstrative tribunal, ' rejecting a revision application cannot be pronounced to be invalid on the sole ground that it does not give reasons for the rejection.
" They distinguished the case of Harinagar Sugar Mills Ltd.(1) on the ground that the Central Government had reversed the decision ' appealed without giving any reasons and the latter did not disclose any apparent grounds for reversal and added: "There is a vital difference between the order of reversal by the appellate authority in that case for no (1) [1962] 2 section
C.R. 339.
315 reason whatsoever and the order of affirmance by the revising authority in the present case.
" As has already began noted, the board of directors in that case did not give any reasons for the refusal to register and the Central Government adopting the same course reversed the decision of the directors without giving any reasons.
Clearly, the act of the Central Government there savoured of arbitrariness.
Under the articles of association of the company, the directors were not obliged to give any reasons.
Their power of refusal was unrestricted if they acted bona fide or in the interest of the company.
The reversal of their discretion clearly amounted to a finding that they had acted arbitrarily or mala fide and one was; left to guess the reasons of the Central Government for coming to this conclusion.
As has already been said, when the authority whose decision is to be reviewed gives reasons for its conclusion and the reviewing authority affirms the decision for the reasons given by the lower authority, one can assume that the reviewing authority found the reasons given by the lower authority as acceptable to it; but where the lower authority itself fails to give any reason other than that the successful applicant was an old lessee and the reviewing authority does not even refer to that ground, this Court has to grope in the dark for finding out reasons for upholding or rejecting the decision of the reviewing authority.
After all a tribunal which exercises judicial or quasi judicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of parties of far reaching consequence to them are adjudicated upon in a summary fashion, without giving a personal hearing where proposals and counter proposals are made and examined, the least that can be expected is that the tribunal should tell the party why the decision is going against him in all cases where the law gives a further right of appeal.
On behalf of the respondents, it was contended that r. 55 which provided for a revision did not envisage the filing of fresh pleadings and fresh material but only invited comments of the parties with regard to the matter before the Central Government.
It was argued that if after going through the comments and counter comments the Central Government found no reason to arrive at a conclusion different from that of the State Government, it was not called upon to disclose any grounds for its decision in review.
Our attention was drawn in particular to r. 26 of the Mineral Concession Rules which enjoined upon the State Government to communicate in writing the reasons for any order refusing to grant or renew a mining lease.
The absence of any provision in r. 55 for giving such reasons was said to be decisive on the matter as indicative of the view of the legislature that there was no necessity for giving reasons for the order on review.
We find ourselves unable to accept this contention.
Take the case 316 where the Central Government sets aside the order of the State Government without giving any reasons as in Harinagar Sugar Mills ' case(1).
The party who loses before the Central Government cannot know why he had lost it and would be in great difficulty in pressing his appeal to the Supreme Court and this Court would have to do the best it could in circumstances which are not conducive to the proper disposal of the appeal.
Equally, in a case where the Central Government merely affirms the order of the.
State Government, it should make it clear in the order itself as to why it is affirming the same.
It is not suggested that the Central Government should write out a judgment as courts of law are wont to do.
But we find no merit in the contention that an authortiy which is called upon to determine and adjudicate upon the rights of parties subject only to a right of appeal to this Court should not be expected to give an outline of the process of reasoning by which they find themselves in agreement with the decision of the State Government.
As a matter of fact, r. 26 considerably lightens the burden of the, Central Government in this respect.
As the State Government has to give reasons, the Central Government after considering the comments and counter comments on the reasons given by the State Government should have no difficulty in making up its mind as to whether the reasoning of the State Government is acceptable and to state as briefly as possible the reasons for its own conclusion.
Our attention was drawn to a judgment of this Court in Nandrant Hunatram, Calcutta vs Union of India(2).
There, one of the points made by the appellant in the appeal to this Court was that the order of the Central Government, in review, upholding the action of the State Government cancelling the mining lease granted to the appellant was bad inasmuch as no reasons were given.
It was pointed out in the judgment in that case that the facts there were so notorious that the reasons for the action of the State Gov ernment and the confirmation of its order by the Central Government were too obvious and could not possibly be questioned by anybody.
There the partners of the appellant firm had fallen out among themselves and none of them was willing to spend money on the colliery with the result that the work came to a stand still and the colliery began to get flooded.
At this juncture, Government stepped in and made a promise to the essential workmen that their wages would be paid and this saved the colliery.
Thereafter the Chief Inspector of Mines was informed by one of the partners of the appellant firm that the other partners were preventing him from making payment for running expenses of the colliery and that he was not in a position to perform his duties as an,occupier.
He accordingly resigned his office.
Tre Manager also (1) [1962]2 S.C.R. 339.
(2) A.I.R. resigned and the Sub Divisional Officer of the district informed Government that the situation had become so alarming that some action on the part of the Government was absolutely necessary.
In spite of notice, the partners refused to take any action with the result that the Government took over the colliery and terminated the lease.
The revision application filed before the Central Government under r. 54 of the rules was turned down without giving any reasons.
Negativing the contention of the appellant that the order of the Central Government was bad in law because no reasons were given, it was said by this Court that "The documents on the record quite clearly establish that the colliery was being flooded as the essential services had stopped functioning and but for the timely intervention of the State Government the col liery would have been lost.
In these circumstances, it is quite clear that the action of the State Government was not only right but proper and this is hardly a case in which any action other than rejecting the application for revision was called for and a detailed order was really not required because after all the Central Government was merely approving of the action taken in the case by the State Government, which stood completely vindicated. .
The action of the State Government far from being arbitrary or cap ricious was perhaps the only one to take and all that the Central Government has done is to approve of it." The last portion of the passage was relied upon by the counsel for the respondents in support of his argument that as the order in review is merely in confirmation of the action of the State Government reasons need not be given.
But the above dictum cannot be considered dissociated from the setting of the circumstances in which it was made.
There it was plain as a pike staff that the State Government had no alternative but to cancel the lease : the absence of any reasons in the order on review could not possibly leave anybody in doubt as to whether reasons were.
As a matter of fact in the setting of facts, the reasons were so obvious that it was not necessary to set them out.
There is nothing in this decision which is contrary to M.P. Industries vs Union(1).
What the decision says is that the reasons for the action of the State were so obvious that it was not necessary, on the facts of the case, to repeat them in the order of the Central Government.
Our attention was also drawn to another judgment of this Court in Commissioner of Income tax vs K. V. pilliah(2).
One of the questions in that case before the High Court of Mysore (1) [1966] T. section C. R. 466.
(2) 43 1.
T R. 411. 318 under section 66(2) of the Indian Income tax Act was, whether, on the facts and in the circumstances of the case, the Income tax Appellate Tribunal was justified in sustaining both the addition ,of Rs. 41 142/ as income from business and Rs. 7,000/ as cash credits, and whether such addition did not result in double taxation.
It was held by this Court that the question whether Rs. 41,142/ was liable to be taxed fell to be determined under.
the first question.
In respect of the other amount of Rs. 7,000/the Income tax Officer had held that the explanation of the assessee was untrue and the Appellate Assistant Commissioner and the Tribunal had agreed with that view.
In this setting of facts, it ,,was said by this Court: "The Income tax Appellate Tribunal is the final factfinding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion.
But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, mnerely because it does not repeat the grounds of the Appellate Assistant Commissioner on which the decision was given against the assessee or the department.
The criticism made by the High Court that the Tribunal had "failed to perform its duty in merely affirming the conclusion of the Appellate Assistant Commissioner" is apparently unmerited.
On the merits of the claim for exclusion of the amount of Rs. 7,000/ , there is no question of law which could be said to arise out of the order of the Tribunal.
" The above observations were sought to be pressed into service 'by the counsel for the respondents 'but there, is a good deal of ,difference between that case and the one with which we have to deal.
The High Court there was merely called upon to give its ,opinion on the statement of facts set out by the Appellate Tribunal.
It was for the Income tax Officer in the first instance to accept or reject the explanation with regard to the cash credit.
It the Income tax Officer found the assessee 's explanation unacceptable, lie had to say why he did not accept it.
Unless the assessee in appeal was able to point out to the Appellate authorities some flaw in the reasoning of the Income tax Officer, it is not necessary for the appellate authorities to give their reasons independently.
The ,explanation of the assessee is either accepted or rejected; but in the case which we have before us, the State Government has to consider the merits and demerits of the applications and to give its reasons why it prefers one to the other or others.
There is a dispute between two or more contesting parties and the reasons for 319 preferring one to the other or others may be more than one.
It is.
not a question of accepting or rejecting an explanation.
In our opinion, what was said in the above Income tax case will not apply in the case of a review by the Central Government of a decision of the State Government under the Act and the Rules.
It may be of interest to note that in Rex vs Northumberland Compensation Appeal Tribunal, Ex parte Shaw(1) an application was made in the King 's Bench Division in England for an order of certiorari for the quashing of a decision reached by the Compensation Appeal Tribunal dismissing an appeal by Shaw against an award to him of compensation for loss of employment as a clerk to a Hospital Board payable under the National Health Service (Transfer of Officers and Compensation) Regulations, 1948.
There the question of the practice and procedure with regard to the issue of a writ of certiorari was gone into at some length.
The tribunal in that case had made a speaking order.
It was contended by the counsel for the tribunal that the King 's Bench Division had no power to examine the order in the case before it on certiorari oil the ground that certiorari went only to defect of jurisdiction.
This was turned down and the Divisional Court held that it had jurisdiction to quash by certiorari the decision of an inferior tribunal when the latter had embodied the reasons for its decision in its order and those reasons are bad in law.
For our purpose, we need only refer to the observations of Lord Goddard, C.J. at p. 724 of the report where he said : "I think it is beneficial in this case that we should do so, not merely having regard to the facts of this case, but because so many tribunals have now been set up, all of whom, I am certain, desire to do their duty in the best way, and are often given very difficult sets of regulations and statutes to construe.
It certainly must be for their benefit, and I have no doubt but that they wilt welcome, that this court should be able to give guidance to them if, in making their orders, they make their orders speaking orders, so that this court can then consider them if they are brought before the court on certiorari '.
" The case for giving reasons or for making a speaking order becomes much stronger when the decision can be challenged not only by the issue of a writ of certiorari but an appeal to this court.
Counsel for the respondents referred us to the comment on this case made by Sir C. K. Allen in his Law and Orders (Second Edition) at p. 259 to p. 261.
According to the learned author, the Northumberland Compensation case might be a great deterrent than encouragement to speaking orders inasmuch as "the prospect (1) [1951]1 K.B. 711.
320 of having their mental process set forth in literary form, might be ,extremely disagreeable to them" and up to the year 1956 did not seem to have assisted greatly the means of recourse against decisions of inferior jurisdictions.
Speaking for ourselves, with great respect to the learned author, we do not think that the position of the Central Government as a reviewing authority tinder the Mineral Concession Rules can be equated with an appellate tribunal of the type whose decision was before the King 's Bench Division in England.
If the State Government is enjoined by law to give its reasons, there is no reason why it should be difficult for the appellate authority to do so.
The necessity and the desirability of tribunals making speaking orders has been adverted upon by different High Courts in India.
Thus in Vedachala Mudaliar vs State of Madras(3) where the State Government of Madras set ,aside the order of the Central Road Traffic Board without giving ;any reasons, it was observed that "When the policy of the Legislature is to confer powers on administrative tribunals with a duty to discharge their functions judicially I do not see any reason why they should be exempted from all those safeguards inherent in its exercise of that jurisdiction.
From the standpoint of fair name of the tribunals and also in the interests of the public, they should be, expected to give reasons when they set aside an order of an inferior tribunal. .
Further, if reasons for an order are given, there will be less scope for arbitrary or partial exercise of powers and the order 'ex facie ' will indicate whether extraneous circumstances were taken into consideration by the tribunal in passing the order." Refrence may also be made to Ramayya vs State of Andhra (2 and Annamalai vs State of Madras(3).
To the same effect is the judgment of the Kerala High Court in Joseph vs Superintendent of Post Offices, Kottayam(1).
We have already commented that the order of the Central Gov ernment in this case is couched in the same language as was used in the case before this court in M.P. Industries vs Union(5) in August 1965.
The old rule 55 was replaced by a new rule which ,came into force on 19th July 1965.
Whereas the old rule directed the Central Government to consider comments on the petition of review by the State Government or other authority only, the new rule is aimed at calling upon all the parties including the State Government to make their comments in the matter and the parties are given the right to make further comments on those made by (1) A.I.R. 1952 Madras 276.
(3) A.I.R. 1957 Andhra Pradesh 739.
(2) I.L.R. 1956 Andhra Kerala 245.
(5) ; 321 the other or others.
In effect, the parties are given a right to bring forth material which was not before the State Government.
It is easy to see that an unsuccessful party may challenge the grant of a lease in favour of another by pointing out defects or demerits which did not come to the knowledge of the State Government.
The order in this case does not even purport to show that the comments and counter comments, which were before the Central Government in this case, had been considered.
It would certainly have been better if the order of 22nd June 1966 had shown that the Central Government had taken into consideration all the fresh material adduced before it and for the reasons formulated they thought that the order of the State Government should not be disturbed.
In the result, the appeals are allowed and the orders of the Central Government passed on 22nd June, 1966 are set aside.
The Central Government is directed to decide the review applications afresh in the light of the observations made.
The appellant will get his costs throughout from the 3rd respondent.
G.C. Appeals allowed.

summary:
The appellant was one of several applicants for a mining lease in Andhra Pradesh.
The State Government however granted it to 'respondent No. 3.
The appellant then filed an application in revision, under section 30 of the Mines & Minerals (Regulation and Development) Act, 1957, read with r. 54, to the Union of India.
Respondent No. 3 filed a counter statement and the State Government filed its comments.
The appellant filed a rejoinder.
The Union Government without hearing the appellant rejected his revision application.
An appeal was filed before this Court.
The question that fell for consideration was whether it was necessary for the Government of India to give reasons for its decision in view of the provisions of the Act and the Rules or aliunde because the decision was liable to be questioned in appeal to this Court.
HELD : (i) In exercising its powers of revision under r. 55 the Central Government discharges functions which are quasi judicial.
The decisions of tribunals in India are subject to the supervisory powers of the High Court under article 227 of the Constitution and of appellate powers of this court under article 136.
Both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word 'rejected ' or 'dismissed '.
In such a case this Court can probably only exercise its appellate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the case.
This would certainly be a very unsatisfactory method of dealing with the appeal.
[308E F; 309B C] If the State Government gives sufficient reasons for accepting the application of one party and rejecting that of others, as it must, and the Central Government adopts the reasoning of the State Government, this Court may proceed to examine whether the reasons given are sufficient for the purpose of upholding the decision.
But when the reasons given in the order of the State Government are scrappy or nebulous and the Central Government makes no attempt to clarify the same, this Court, in appeal may have to examine the case de novo, without anybody being the wiser for the review by the Central Government.
The same difficulty would arise where the State Government gives a number of reasons some of which are good and some are not and the Central Government gives its decision without specifying those reasons which according to it are sufficient to uphold the order of the State Government.
That is why in such circumstances, what is known as a 'speaking order ' is called for.
[309C F] 3 03 A 'speaking order ' is all the more necessary in the case of a decision under r. 55 because there is provision for new material being placed before the Central Government which was not there before the State Government, and further, because the decision, affecting important rights of parties, is given in a summary manner without a hearing being allowed to the parties.
A party is entitled to know why the decision has gone against him.
[320G 321B] The absence in r. 55 of any provision for giving such reasons is not decisive of the matter in view of the above considerations.
[315H] Shivji Nathubhai vs The Union of India, ; , M.P. Industries vs Union, ; , Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunihunwala, ; and Sardar Govindraov.
State, [1965] 1 S.C.R. 678, followed.
Nandram Hunatram, Calcutta vs Union of India, A.I.R. 1966 S.C.1922 and Commissioner of Income tax vs K. V. Pilliah, , distinguished.
Rex vs Northumberland Compensation Appeal Tribunal Ex parte Shaw, , Vedachala Mudaliar vs State of Madras, A.I.R. 1952 Madras 276, Rantayya vs State of Andhra, I.L.R. 1956 Andhra 712, Annamalai vs State of Madras, A.I.R. 1957 Andhra Pradesh 738 and Joseph vs Superintendent of Post Offices, Kottayam, I.L.R. 1961 11 Kerala 245, referred to.


judgement:
minal Appeal No. 217 of 1966.
Appeal by special leave from the judgment and order dated September 16, 1966 of the Bombay High Court in Criminal Appeal No. 1349 of 1965.
R. Jethamalani, N. H. Hingorani and K. Hingorani, for the appellant.
D. R. Prem and section P. Nayyar, for the respondent.
The judgment of the Court was delivered by Hidayatullah, J.
On November 16, 1964, the shop of the ap pellant Govani situated in Suklaji Street, Bombay was searched by the Enforcement Branch of the Reserve Bank of India.
Nothing incriminating from the point of view of the Reserve Bank was found in the shop but a large number of watches, clocks, cigarette lighters, cameras, transistors, tape recorders, etc., were found.
The officers of the Enforcement Branch appear to have informed the customs authorities.
The Assistant Collector of Customs thereupon issued a warrant for the search of the premises under section 105 of the .
This warrant was made out in the name of Preventive Additional Chief Inspector R. C. Dutta, Preventive Inspector P. N. Ramchandani and Preventive Officers Ranade, Thakur and Menon.
It was stated in the warrant that there were 417 reasons to believe that prohibited and dutiable goods liable to confiscation and documents and things useful for and relevant to the proceedings were secreted in the shop.
The officers were accordingly charged with the duty to search and seize such prohibited and dutiable goods, documents and things in the shop under section 110 of the Act.
The search was effected and the goods above mentioned were seized.
Some of the watches were returned as they were old and given for repairs.
The other watches were seized.
Proceedings for the confiscation of the goods and for penalties were started by Dutta and a summons under section 108 of the Act was issued to Govani.
He could not prove that the goods had borne the necessary customs duties.
The Additional Collector of Customs, Bombay thereupon sanctioned his prosecution under section 135(b) of the Act.
The trial took place before the Presidency Magistrate (19th Court), Bombay.
Govani was charged on two counts, under.
135(a) and section 135(b) of the .
Two witness es were examined at the trial.
Preventive Officer, Customs, Ranade deposed to the seizure of the goods.
As the search was under the direction of Dutta, Ranade admitted in cross examination that he was told by Dutta that information had been received that Govani had secreted some contraband articles in his shop.
He admitted that Dutta decided which of the watches were to be seized and which were to be released.
Ranade, however, stated that he had asked Govani to produce bills regarding the watches but Govani produced none.
He had also asked Govani to produce the account books but Govani again did not produce any.
The second witness Nanvani only proved the seizure of the contraband goods and the exhibits in the case.
He was not cross examined.
Govani did not lead any evidence in his own behalf.
He was examined under section 342 of the Code of Criminal Procedure and admitted that he had neither imported the watches nor paid customs duty on them.
He stated that he had purchased the watches from certain customers, sometimes one and sometimes two or three from the same customer.
He had no defence evidence to lead but filed a written statement and claimed that no offence had been disclosed against him in the prosecution case as laid before the court.
He analysed section 135 of the Act and stated that the gist of the offence was that he should have known or have had reason to believe that the contraband goods had not been customed.
He stated that under section 123 of the Act, the burden would have been on him to prove that the goods had been customed provided the goods had been seized under the Act in the reasonable belief that they were smuggled goods but no witness had deposed to such belief.
This statement was filed on July 15, 1965.
The following day, the prosecution applied for the examination of Dutta, Inspector of Customs, Bombay as a court witness in the interests of justice.
418 This application was opposed by Govani.
The Magistrate, however, by his order dated July 26, 1965, ordered the examination of Dutta under section 540 of the Code.
Dutta stated that he had seized the watches in the reasonable belief that they were smuggled.
Govani was thereafter examined again and was given an opportunity to lead defence evidence.
He stated that he had nothing further to add and no defence evidence to lead.
The Magistrate.
after considering the arguments, convicted Govani under sections 135(a) and 135(b) of the awarding him a sentence of one year 's rigorous imprisonment and a fine of Rs. 2,000/ (in default, further rigorous imprisonment for six months) on each of the two counts.
The watches were also ordered to be confiscated.
Govani appealed to the High Court.
His main contention was that the evidence of Dutta was improperly received by the Magistrate and should be excluded from consideration.
The High Court rejected these contentions and accepting the testimony of the witnesses on facts, upheld the conviction.
Govani now appeals to this Court by special leave.
The grant of special leave is limited to the questions whether the evidence of Dutta was improperly received by the Magistrate and whether, if excluded, the conviction of Govani can be supported.
The question falls to be considered under section 540 of the Code ,of Criminal Procedure.
That section is to be found in Chapter 46 of the Code among several others which have been appropriately described in the heading to the chapter as 'miscellaneous '.
It provides : " section 540 : Any Court may, at any stage of any inquiry, trial or other proceeding under this Code, summon any person as a witness, or examine any person in attendance, though not summoned as a witness, or recall and re examine any person already examined; and the Court shall summon and examine or recall and reexamine any such person if his evidence appears to it essential to the just decision of the case.
" The section gives a power to the court to summon a material witness or to examine a person present in court or to recall a witness already examined.
It confers a wide discretion on the COURT to act as the exigencies of justice require.
Another aspect of 'his power and complementary to it is to be found in section 165 of the Indian Evidence Act which provides: " section 165 : The Judge may, in order to discover or to obtain proper proof of relevant facts,, ask any question he pleases, in any form, at any time, of any witness, or of the parties, about any fact relevant or irrelevant; and may order the production of any document or 419 thing; and neither the parties nor their agents shall be entitled to make any objection to any such question or order, nor, without the leave of the Court, to crossexamine any witness upon any answer given in reply to any such question These two sections between them confer jurisdiction on the Judge to act in aid of justice.
The Presidency Magistrate, Esplanade, in, dealing with the petition to call Dutta passed an order on July 26, 1965 in which he remarked that there was no gap or lacuna in the prosecution case to fill because Dutta was named as one of the witnesses and as the officer who had seized the watches.
He held that the evidence of Dutta was necessary for the just decision of the case.
He accordingly granted leave for the examination of Dutta.
In view of the fact that he spoke in the language of the second part of section 540, it is reasonable to think that he exercised the powers conferred on him under the second part although his order is not clear as to which part he had in mind.
He, however, ruled that Govani would be further examined under section 342 of the Code of Criminal Procedure and allowed to lead further evidence.
This action of the Magistrate which was approved by the High Court, is challenged before us.
It is submitted that the powers under section 540, however wide, must be reconciled with the mandatory requirements of Chapter 21 laying down the procedure of trial of warrant cases by Magistrates.
It is pointed out that the trial had gone through the stage of taking evidence for the prosecution (section 252), framing of the charge (section 254), recording of the plea (section 255) and the defence (section 256) of the accused and as Govani did not wish to lead evidence.
(section 257), it had reached the stage of section 258 and the court could either acquit or convict him.
It is, therefore, submitted that the Magistrate had really allowed the prosecution to fill a gap in the case which had the effect of dispensing with the burden which was on the prosecution to prove the case under section 135 (a) and (b) of the and of placing the burden upon Govani to rebut the presumption that the goods were smuggled.
This, it is said, is not only unfair but unjust and cannot be regarded as falling within the powers of the court, however, wide the language of the section.
We shall consider these objections and refer to the rulings which were cited before us in support of them.
To begin with, we do not accept as sound the argument that Chapter 21 must limit the powers under section 540.
Offences under .he Code of Criminal Procedure are tried in different ways according to their gravity.
There are thus trials of summons and war5 Sup.
C.I./67 13 420 rant cases by Magistrates, trials before High Courts and Courts of Session and summary trials.
All these trials have their procedure laid down from one step to another till the stage is reached for acquittal or conviction.
If the argument advanced on the basis of the procedure laid down in Chapter 21 is accepted there would be no room for the exercise of the power under section 540 because it would always be impossible to fit it into any chapter without doing violence to the sequence established there.
Section 540 is intended to be wide as the repeated use of the word 'any ' throughout its length clearly indicates.
The section is in two parts.
The first part gives a discretionary power but the latter part is mandatory.
The use of the word 'may ' in the first part and of the word 'shall ' in the second firmly establishes this difference.
Under the first part, which is permissive, the court may act in one of three ways : (a) summon any person as a witness, (b) examine any person present in court although not sum moned, and (c) recall or re examine a witness already examined.
The second part is obligatory and compels the Court to act in these three ways or any one of them, if the just decision of the case demands it.
As the section stands there is no limitation on the power of the Court arising from the stage to which the trial may have reached, provided the Court is bona fide of the opinion that for the just decision of the case, the step must be taken.
It is clear that the requirement of just decision of the case does not limit the action to something in the interest of the accused only.
The action may equally benefit the prosecution.
There are, however, two aspects of the matter which must be distinctly kept apart, The first is that the prosecution cannot be allowed to rebut the defence evidence unless the prisoner brings forward something suddenly and unexpectedly.
This was laid down by Tindal, C.J. in.
words which are oft quoted : "There is no doubt that the general rule is that where the Crown begins its case like a plaintiff in a civil suit, they cannot afterwards support their case by calling fresh witnesses, because they are met by certain evidence that contradicts it.
They stand or fall by the evidence they have given.
They must close their case before the defence begins; but if any matter arises ex improviso, which no human ingenuity can foresee, on the part of a defendant in a civil suit, or a prisoner in a criminal case, there seems to me no reason why that matter which so arose ex improviso may not be answered by contrary evidence on the part of the Crown." (Reg.
vs Frost)(1).
There is, however, the other aspect namely of the power of the Court which is to be exercised to reach a just decision.
This power (1) at 386.
421 is exercisable at any time and the Code of Criminal Procedure clearly so states.
Indeed as stated by Avory J. in Rex vs Dora Harris(1) : "The cases of Reg.
vs Chapman ; and Reg.
vs Holden ; establish the proposition that the presiding judge at a criminal trial has the right to call a witness not called by either the prosecution or the defence, if in his opinion this course is necessary in the interests of justice.
It is true that in none of the cases has any rule been laid down limiting the point in the proceedings at which the judge may exercise that right." However the learned Judge points out that injustice is possible unless some limitation is put upon the exercise of that right and he adopts for that purpose the rule laid down by Tindal, C.J. in Reg.
vs Frost(2) even in those cases where a witness is called by the Judge after the case for the defence is closed, and states, "that the practice should be limited to a case where the matter arises eximproviso, which no human ingenuity can foresee, on the part of a prisoner, otherwise injustice would ensue" and cites the case of Reg.
vs Haynes(3) where Bramwell B. refused to allow fresh evidence to be gone into after the close of the whole case.
In Dora Harris 's(1) case, five persons were tried, two for stealing and they pleaded guilty and three others for receiving who pleaded not guilty.
The first two remained in the dock and the trial proceeded against the other three.
They gave evidence on their own behalf and the prosecution case was not quite strong.
The Recorder then asked one of the other two accused to give evidence and allowed the prisoner Dora against whom the evidence went to cross examine him but did not ask Dora to enter the box again to contradict the new evidence.
This was held by the Court of Criminal Appeal to be a wrong exercise of the power of the Court.
It was an extreme example of the exercise of the power.
Mr. Jethmalani relies strongly upon this case and cites several decisions of the High Courts in India in which this dictum was applied.
In particular he relies upon In re K. V. R. section Mani(4 ), Shreelal Kajaria vs The State(5) and In re V. Mahadevan(6).
In these cases it is laid down that the powers under section 540 of the Code of Criminal Procedure, wide though they may be, must not be exercised to the disadvantage of the accused, particularly after his defence is over.
There is nothing new in these cases.
They follow in essence the decision in Reg.
vs Frost(2) as applied in Dora.
Harris(1) case.
(1) at 594.
(2) 4St.
(N.S.) 85 at 386.
(3) [1859] 1 F. & F. 666.
(4) I.L.R. [1951] Mad.
(5) 1, (6) 422 On the other side reliance is placed upon In re K. K. Narayanali Nambiar(1), State vs Sheikh Mohamad Abdullah and others,(2), Ratnakar Das vs The State and others(3) and Ramjeet and others vs State(4) among others in which a liberal interpretation in favour of the court 's powers is placed upon the section.
It is not necessary to refer to the cases cited on either side.
They illustrate the application of the general principle spoken to by Avory J. in the extract from Dora Harris(5) case and the condition laid down in Reg.
vs Frost(6) Dora Harris and Reg.
vs Frost cases involved rebuttal of the defence evidence.
In neither case was there any unexpected move by the prisoner and the evidence was therefore, wrongly admitted.
It is difficult to limit the power under our Code to cases which involve something arising eximproviso which no human ingenuity could foresee, in the course of the defence.
Our Code does not make this a condition of the exercise of the power and it is not right to embark on judicial legislation.
Cases that go that far are of course not quite right.
Indeed they could be decided on fact because it can always be seen whether the new matter is strictly necessary for a just decision and not intended to give an unfair advantage to one of the rival sides.
Even in England where the rule in Dora Harris(5) case obtains, the powers of the Court have not been held to be wrongly exercised, when fresh evidence has been let in for a just decision.
In William Sullivan(7) rebutting evidence was held to be properly called when the accused put forward a suggestion which could not have been foreseen and in John Mckenna(8) it was held that a judge had complete discretion whether a witness should be recalled and that the Court of Criminal Appeal would not interfere unless it was made to appear that injustice had been caused.
In that case (like the one here) the defence had closed the case and the accused had submitted that there was no case to go to the jury.
It would appear that in our criminal jurisdiction, statutory law confers a power in absolute terms to be exercised at any stage of the trial to summon a witness or examine one present in court or to recall a witness already examined, and makes this the duty and ,obligation of the Court provided the just decision of the case demands it.
In other words, where the court exercises the power under the second part, the inquiry cannot be whether the accused has brought anything suddenly or unexpectedly but whether the ,court is right in thinking that the new evidence is needed by it for a just decision of the case.
If the court has acted without the requirements of a just decision, the action is open to criticism but (1) A.I.R. 1942 Mad.
(3) A.I.R. 1966 Orissa 102.
(5) at 594.
(7) (2) (4) I.L.R. [1958] All. 52.
(6) at 386.
(8) 423 if the court 's action is supportable as being in aid of a just decision the action cannot be regarded as exceeding the jurisdiction.
In the present case the position is this.
In 1955, by a notification under the Imports and Exports (Control) Act, 1947, the import of watches, clocks and parts thereof except under a licence was completely stopped [Notification No. 17/1955 dated December 7, 1955 known as Imports (Control) Order, [1955].
Govani was found on November 16, 1964 to be in possession of 305 watches of foreign make.
The warrant of search issued by the Assistant Collector of Customs recited : "Whereas there are reasons to believe that prohibited and dutiable goods liable to confiscation . are secreted in.
Premises of Shri G. K. Gowani, Shop No. 20, Suklaji Street, Bombay, etc." The watches (among other articles) were seized by Dutta.
He separated the old watches from the new and asked to see any document which would show that the watches were legitimately imported.
Govani produced no document although a summons under section 108 of the was served upon him.
The watches were, therefore, seized.
There was evidence to show that in 1963 1,300 watches were seized from Govani 's locker in a safe deposit vault but the prosecution then had resulted in acquittal.
The Magistrate and the High Court were of opinion that these circumstances might lead to a reasonable belief in the mind of the person seizing the watches, that they were smuggled.
The prosecution examined Ranade, Prevention Officer, Customs who had assisted at the search but failed to examine Dutta who seized the watches and under whose direction the search was conducted.
The question was why were the watches seized ? They were obviously not seized because they were stolen property or belonged to some other person.
They were seized after search on a warrant which expressed the belief that they were smuggled and after affording Govani an opportunity by notice to explain his possession.
It is obvious that the just decision of the case required a finding whether they were smuggled or not.
The circumstances already deposed to by Mukund Ranade and otherwise on the record clearly established that someone must have seized the watches entertaining a belief that they were smuggled.
This belief obviously was entertained by Dutta.
This was not a case in which the prosecution was trying to fill a gap in the pro secution case.
The court was right in thinking that a just decision of the case required that the nature of the belief underlying the seizure should be before it on oath of the person making the seizure so that Govani might be required, as the policy of the requires, to prove his innocent possession.
Govani had really no defence in view of the Control Order of 1955 and the gap of time between the promulgation of the order and the 424 date of the seizures.
He admitted this before and after Dutta 's evidence.
In these circumstances it cannot be said that the court had exceeded its jurisdiction in acting under the second part of section 540 of the Code of Criminal Procedure.
As Dutta 's evidence was rightly taken and gone into, and as Govani had no defence beyond taking advantage of the inadvertent omission, the defence had no merit.
The conviction was, therefore, rightly reached.
The appeal fails and is dismissed.
R.K.P.S. Appeal dismissed.

dataset_name: IN-Abs

summary:
Upon a warrant issued under section 105 of the , the appellants ' shop was searched and a number of watches, clocks, etc., were seized.
As he could not prove that the goods had borne the necessary customs duty, the appellant was prosecuted on two counts under sections 135(a) and 13 5 (b) of the .
The appellant did not lead any evidence in his own behalf.
He filed a written statement in which he claimed, inter alia, that no offence had been disclosed against him as under section 123 of the Act the burden would have been on him to prove that the goods had be en customed provided the goods had been seized under the Act in the reasonable belief that they were smuggled goods but no witness had deposed to such belief.
The day after this statement was filed, the prosecution applied for the examination of the Customs Officer who was in charge of the search as a court witness in the interest of justice.
Although this application was opposed by the appellant, the Magistrate ordered the examination of the officer under section 540 of the Code in the course of which he stated that he had seized the watches in the reasonable belief that they were smuggled.
The appellant was thereafter examined again and was given an opportunity to lead defence evidence but he stated that he had nothing further to add and no evidence to lead.
The, trial court then convinced the appellant under Sections 135(a) and 135(b).
An appeal to the High Court against this conviction was dismissed.
In the appeal to this Court by special leave, the question for determination was whether the evidence of the officer was improperly received by the Magistrate and whether if excluded the conviction of the appellant could be supported.
It was contended an behalf of the appellant that the. powers under section 540, however wide, must be reconciled with the mandatory requirements of Chapter 21 laying down the procedure of trial of warrant cases by Magistrates and that as the trial bad gone through the various stages and had reached the stages of section 258, the court could either acquit or convict him; it was therefore submitted that the Magistrate had really allowed the prosecution to fill a gap in the. case which had the effect of dispensing with the burden which was on the prosecution to prove the case under sections 135(a) and (b) of the Custom Act and of placing the burden upon the appellant to rebut the presumption that the goods were smuggled; HELD : Dismissing the appeal, The contention that Chapter 21 must limit the powers under Section 540 must be rejected.
Offences under the Code of Criminal Procedure are 416 tried in different ways according to their gravity.
The trials in the Magistrate 's courts the High Courts and Courts of Session as well as summary trials have their procedure laid down from one step to another till the state is reached for acquittal or conviction.
If the argument advanced on the basis of the procedure laid down in Chapter 21 was to be accepted, there would be no room for the exercises of the power under section 540 because it would always be impossible to fit it into any chapter without doing violence to the sequence established there.
[419H 420B] In the present case the trial Judge appeared to have exercised power conferred on him under the second part of section 540 i.e., to admit the evidence of the officer as essential to the just decision of the case.
As die Section stands, there is no limitation on the power of the court arising from the stage to which the trial may have reached provided the court is bona fide of the opinion that for the just decision of the case steps authorised by the Section may be taken.
[420D E] It was obvious that a just decision in the present case required finding whether the watches, etc., seized were smuggled or not.
The circumstances already on record clearly established that some one must have seized the watches entertaining a belief that they were smuggled and this belief obviously was entertained by the Officer in charge of the search.
This was not a case in which the prosecution was trying to fill a gap in its case.
The court was right in thinking that a just decision of the case required that the nature and the plea underlying seizure should be before it on oath of the person making the seizure so that the appellant might be required, as the policy of the requires, to prove his innocent possession.
[423F H] Case law discussed.