Effect of Breach of Natural Justice

Effect of breach of natural justice
When passing an order requires authorization to follow the principles of natural justice, but
fails to do so, the general judicial opinion is that the order is void.
In India, the situation is well settled that an order passed in violation of the principles of
natural justice is void.
Failure to give reason

Where the reason for the decision is not given to the person concerned or the reasons are not
given to the court, the order is quashed and the authority is directed by the court to re-
examine the case. Where the person concerned for reasons is not informed that they are on
record, in some cases, the court has upheld the action, but in some other cases, the court has
not upheld it.
Case laws: Principles of natural justice
1. Ajantha Industries vs. Central Board of Direct Taxes

The court has held that recording the reasons on file is not sufficient. It is necessary to give
reasons to the person concerned. In this case, the order was dismissed on the grounds that the
person concerned had not been communicated. The view expressed in the Ajanta Industries
case appears to be a better view. The reasons are for the benefit of the party concerned and
therefore, they should be reported to the person concerned and should not be limited to the
record or file.
Ingredients of fair hearing: a hearing will be treated as fair hearing if the following conditions
are satisfied:
1. Adjudicating authority receives all the relevant material produced by the individual
2. The adjudicating authority discloses the individual concerned evidence or material which
it wishes to use against him
3. The adjudicating authority providing the person concerned an opportunity to rebut the
evidence or material which they said authority wants to use against him
3. Reasoned Decision Basically, it has 3 grounds on which it relies:-
1. The aggrieved party has the chance to demonstrate before the appellate and
provisional court that what was the reason which makes the authority to reject it.
2. It is a satisfactory part of the party against whom the decision is made.
3. The responsibility to record reasons works as obstacles against arbitrary action by the
judicial power vested in the executive authority. Conclusion The principles of natural
justice have been adopted and followed by the judiciary to protect public rights
against the arbitrary decision by the administrative authority. One can easily see
that the rule of natural justice includes the concept of fairness: they stay alive and
support to safeguard the fair dealing. So at all the stages of the procedure if any
authority is given of the judicial function is not purely accepted but the main motive of the
principal is to prevent the miscarriage of justice. It is supreme to note that any decision or
order which violates the natural justice will be declared as null and void in nature, hence one
must carry in mind that the principles of natural justice are essential for any administrative
settlement to be held valid. The principle of natural justice is not confined to
restricted walls the applicability of the principle but depends upon the characteristics of
jurisdiction, grant to the administrative authority and upon the nature of rights
affected of the individual.
Violation of principles of natural justice - Effect on jurisdiction In Ponkunnam Traders v.
Addl. ITO [1972] 83 ITR 508 (Ker.), Mathew J., dealing with a case arising under the
Income Tax Act, held that the failure to conform to the principles of natural justice would
make a judicial or quasi-judicial order void, and such an order cannot be validated by the
appellate or revisional orders. This is a landmark decision on the question of exercise of
jurisdiction and effect of non-compliance to the principles of natural justice. In this case,
there is comprehensive discussion about a void and voidable order. The decision in
Ponkunnam Traders was confirmed in appeal by a Division Bench of the High Court in Addl.
ITO v. Ponkunnam Traders [1976] 102 ITR 366 (Ker.).
In State of Kerala v. Shaduli Grocery Dealer (K.T.) AIR 1977 SC 1627, the Supreme Court
observed that the tax authorities entrusted with the power to make assessment of tax
discharge quasi-judicial functions and they are bound to observe the principles of natural
justice in reaching their conclusions. The Court held that although the Officer ‘is not fettered
by technical rules of evidence and pleadings, and he is entitled to act on material which may
not be accepted as evidence in a court of law but that cannot deviate him from the principles
of natural justice’. It was held that when the assessment was based on information collected
from the books of a third party, necessary opportunity must be given for cross examination, if
specifically requested for, when such information formed the sheet anchor of evidence to
frame the assessment. In this case, the assessment was declared as void, confirming the
decision of the Kerala High Court, for not affording opportunity for cross examination of the
third party. It is apt to recall the observations of Denning L.J. in Barnard v. National Dock
Labour Board [1953] 2 QB 18/1 All ER 1113 (CA), which are as follows: “So where a
decision is null by reason of want of jurisdiction, it cannot be cured by any appellate
proceedings; failure to take advantage of this somewhat futile remedy does not affect the
nullity inherent in the challenged decision. The party affected by the decision may appeal but
he is not bound to do so, because he is at liberty to treat the act as void.”

Effect of Breach of Natural Justice

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Effect of Breach of Natural Justice

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Effect of breach of natural justice

Failure to give reason

Case laws: Principles of natural justice

1. Ajantha Industries vs. Central Board of Direct Taxes

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