Irrelevant Considerations Mixed Considerations Leaving Out Relevant Considerations

Irrelevant Considerations, Mixed Considerations, Leaving Out Relevant Considerations Santosh K Upadhyay

• Discretionary power must be exercised on relevant considerations. The concerned public authority/body must exercise discretion by taking into account relevant consideration mentioned in the statute. If no such relevant considerations mentioned in the statute then the legality of the considerations on basis of which the discretion was exercised would be determined by their compatibility with the purposes of the discretion. • The exercise of discretion is bad if it is based on the extraneous considerations vis a vis the purposes and policy of the Act/provision that confers discretion. • It is a separate ground of judicial review of administrative action.

• The legislature confers the discretion with the intention that it should be used to promote the policy and objects of the Act, the policy and objects of the Act must be determined by construing the Act as a whole and construction is always a matter of law for the Court. The Court can quash an exercise of discretionary power if it has been exercised for reasons which in the opinion of the Court are not good reasons or bad reasons. Padfield v Minister of Agriculture, Fisheries and Food (1967)

• The discretion of a statutory body is never unfettered. It is a discretion which is to be exercised according to law. That means at least this: the statutory body must be guided by relevant considerations and not by irrelevant. If its decision is influenced by extraneous considerations which it ought not to take into account, then the decision can not stand. No matter that the statutory body may have acted in good faith; nevertheless the discretion will be set aside. . . Lord Denning MR in Breen v. Amalgamated Engineering Union (1971)

Cases • Padfield v. Minister of Agriculture, Fisheries and Food (1968) – The Agricultural marketing Act 1958, sec 19 – prices fixed by Milk Marketing Board are too low for the petitioners– Minister refused to refer the issue to be investigated by the Committee of investigation – the grounds of refusal were not germane or relevant to the purposes for which the discretion was conferred upon – House of Lords held it was bad exercise of discretion and issue mandamus- the Aftermath of the case further talks about limitation of judicial review.

• Ram Manohar Lohia v. State of Bihar – Defence of India Rules 1962 – rules permitted the detention on the ground of subversion of public order – detention was made on subversion of law and order – bad exercise of discretion.

• R L Arora v. State of UP (1962) Arora I – Land Acquisition Act 1894 – land was acquired for the private company for constructing parts of textile machinery – Government consent was necessary that such acquisition is needed for the construction of a work that is useful for the public – Government satisfied – but Court held that it should be directly useful for the public- After the decision amendment – consent was needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work, which is for public purpose - Arora II (1964) - court refused to intervene.

• Manyata Devi v State • State of Bombay v K P Krishnan Respondent Union addressed four demands to the company- only two demands were admitted into conciliation- these are- classification of certain employees and about demand of bonus- Management saying employees have adopted go slow, so no bonus – however, employees were saying that despite go slow-company has made profit so demand of bonus exists- conciliation remains infructuous – Gov refused to refer the dispute for adjudication by Industrial Tribunal under sec 12(5) citing the reason that workmen resorted to go slow during the year 1952 -53 - and this reason given by the government for not referring the dispute was under contention that whether the discretion to refer or not to refer exercised on the consideration that workmen adopted go slow tactics- it means whether the reason given by the government is germane to the purposes for which the discretion is conferred upon the Govenrment under sec 12 (5) of the Industrial Disputes Act.

• Following are the important observations made by the Court. 1. “The order passed by the Government under Section 12(5) of Industrial Dispute Act may be an administrative order and the reasons recorded by it may not be justiciable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny; in that sense it would be correct to say that the court hearing a petition for mandamus is not sitting in appeal over the decision of the Government; nevertheless if the court is satisfied that the reasons given by the Government for refusing to make a reference are extraneous and not germane then the court can issue, and would be justified in issuing, a writ of mandamus even in respect of such an administrative order. ” (p. 149, para 17, case material)

2. The reasons communicated by the Government do not show that the Government was influenced by any other consideration in refusing to make the reference. It is further difficult to appreciate how the misconduct of the respondents on which the decision of the Government is based can have any relevance at all in the claim for the classification of the specified employees which was one of the items in dispute. If the work done by these employees prima facie justified the claim and if as the conciliator’s report shows the claim was in consonance with the practice prevailing in other comparable concerns the misconduct of the respondents cannot be used as a relevant circumstance in refusing to refer the dispute about classification to industrial adjudication. It was a claim which would have benefitted the employees in future and the order passed by the appellant deprives them of that benefit in future. Any considerations of discipline cannot, in our opinion, be legitimately allowed to impose such a punishment on the employees. (p. 151, case material)

3. A claim for bonus is based on the consideration that by their contribution to the profits of the employer the employees are entitled to claim a share in the said profits, and so any punitive action taken by the Government by refusing to refer for adjudication an industrial dispute for bonus would, in our opinion, be wholly inconsistent with the object of the Act. If the Government had given some relevant reasons which were based on, or were the consequence of, the misconduct to which reference is made it might have been another matter. Under these circumstances we are unable to hold that the High Court was in error in coming to the conclusion that the impugned decision of the Government is wholly punitive in character and must in the circumstances be treated as based on a consideration which is not germane and is extraneous. It is clear that the Act has been passed in order to make provision for the investigation and settlement of industrial disputes, and if it appears that in cases falling under Section 12(5) the investigation and settlement of any industrial dispute is prevented by the appropriate Government by refusing to make a reference on grounds which are wholly irrelevant and extraneous a case for the issue of a writ of mandamus is clearly established. (p, 151, last paragraph, case material)

Mixed Considerations • The approach of the judiciary does not depict a uniform approach on this issue. • Mostly in the cases of limitation on personal liberty, the courts are very strict and declared the administrative action as bad in law. Post detention affidavits of clarifying the grounds or providing fresh grounds is generally not good. But in other cases not dealing with personal liberty, courts have also accepted such discretion as good.

Leaving Out Relevant Considerations • If in exercising the discretionary power, an administrative authorities ignores relevant considerations, its action will be invalid. • Ranjit Singh v Union of India (Case Material) Facts: Gun manufacturing unit- quota was lowered – sustenance of activities became extremely difficult with the decreased quota- Gov Industrial Policy Resolution 1956 held that lowering of quota was affected by leaving out the relevant considerations like the production capacity of the factory, the quality of guns produced and the economic viability of the Unit- hence the lowering of quota was bad in law – GOI was directed to reconsider the fixed quotas in light of the judgement and other records produced by the affected persons.

• • Important observation from the court: (p. 153, first two paragraphs, case material) Plainly, what was envisaged was a prohibition against an increase in the quota, not its curtailment. Purporting to implement the Industrial Policy Resolution, the Government issued instructions that the quota fixed should be such that the market was not flooded with arms and ammunition. No objection can be raised to that. It is as it should be, but with that primary consideration defining the outer limits, there are other factors which govern the fixation of the actual quota. There is the production capacity of the factory, the quality of guns produced and the economic viability of the unit. The Government is bound to keep these in mind while deciding on the manufacturing quota. There is need to remember that the manufacture of arms has been the business of some of these units for several years and the Industrial Policy Resolution contains a specific commitment to permit the continuance of those factories. On the other side, the Government is entitled to take into consideration the requirements of current administrative policy pertinent to the maintenance of law and order and internal security. Any curtailment of the quota must necessarily proceed on the basis of reason and relevance. If all relevant factors are not considered, or irrelevant considerations allowed to find place, the decision is vitiated by arbitrary judgment. On the material placed before us, we are not satisfied that the Government of India has taken into careful consideration the several elements necessary forming a decision on the quota permissible to each of these petitioners. We are of opinion that it should do so now.

• Thank you…