2004 Supreme(SC) 1408

2004(8) Supreme 147
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
N. Santosh Hegde, S.N. Variava, B.P. Singh, H.K. Sema & S.B. Sinha, JJ.
Madhya Pradesh Special Police Establishment -Appellant
versus
State of Madhya Pradesh & Ors. -Respondents
Civil Appeal Nos. 7256-7257 of 2004
(Arising out of SLP (C) Nos. 7697-7698 of 2003)
Decided on 5-11-2004
Counsel for the Parties :
For the Appellant : Soli J. Sorabjee, Sr. Advocate, Manish Singhvi, P.H. Parekh, Sameer Parekh, D.P. Monthy, Ms. Shireen S.P. Singh, Advocates for M/s. P.H. Parekh & Co., Advocates.
For the State of M.P. : Satish K. Agnihotri, Rohit K. Singh, Amit Mishra, Advocates.
For the Respondent No. 4 : Vivek K. Tankha, Ashok K. Gupta, Farrukh Rasheed and Siddartha Singh Chauhan, Advocates.

IMPORTANT POINT
Undoubtedly, in a matter of grant of sanction to prosecute the Ministers, the Governor is normally required to act on aid and advice of the Council of Ministers but an exception may arise where as a matter of propriety the Governor may have to act in his own discretion.

Headnote:(i) Constitution of India-Article 163-Prosecution of Ministers-Powers of Governor to act in his discretion and against aid and advice of Council of Ministers in a matter of grant of sanction-Concept of the Governor acting in his discretion or exercising independent judgment is not alien to the Constitution-There can be matters where the Governor can act in his discretion even though the Constitution has not expressly so provided-Such a situation may be where bias is inherent and/or manifest in the advice of Council of Ministers-Question in such cases would not be whether they would be bias-Question would be whether there is reasonable ground for believing that there is likelihood of apparent bias.

       Held : The normal rule is that the Governor acts on the aid and advice of the Council of Ministers and not independently or contrary to it. But there are exceptions under which the Governor can act in his own discretion. Some of the exceptions are as set out hereinabove. It is however clarified that the exceptions mentioned in the Judgment are not exhaustive. It is also recognized that the concept of the Governor acting in his discretion or exercising independent judgment is not alien to the Constitution. It is recognized that there may be situations where by reason of peril to democracy or democratic principles an action may be compelled which from its nature is not amendable to Ministerial advice. Such a situation may be where bias is inherent and/or manifest in the advice of the Council of Ministers. (Para 11)

       The question in such cases would not be whether they would be bias. The question would be whether there is reasonable ground for believing that there is likelihood of apparent bias. Actual bias only would lead to automatic disqualification where the decision-maker is shown to have an interest in the outcome of the case. The principle of real likelihood of bias has now taken a tilt to real danger of bias and suspicion of bias . (Para 13)

       Undoubtedly, in a matter of grant of sanction to prosecute the Governor is normally required to act on aid and advice of the Council of Ministers and not in his discretion. However, an exception may arise whilst considering grant of sanction to prosecute a Chief Minister or a Minister where as a matter of propriety the Governor may have to act in his own discretion. Similar would be the situation if the Council of Ministers disable itself or disentitles itself. (Para 18)

       (ii) Constitution of India-Article 163-Prevention of Corruption Act, 1983-Section 13(1)(d) rw/s 13(2)-Indian Penal Code, 1860-Section 120-B-Grant of sanction for prosecution of Ministers-Powers of Governor -Complaint was made to Lokayukta against two Ministers in the Government of M.P. for having released 7.5 acres of land illegally-Report submitted by Lokayukta holding that there were sufficient grounds for prosecuting the two Ministers under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act and also for offences of criminal conspiracy-Council of Ministers refused sanction-However, Governor granted sanction holding that prima facie case for prosecution of two Ministers had been made out-Whether Governor could act contrary to aid and advice of Council of Ministers-(Yes).

       Held : Mr. Soli J. Sorabjee has not placed any material to show as to how the Council of Ministers collectively or the members of the Council individually were in any manner whatsoever biased. There is also no authority for the proposition that a bias can be presumed in such a situation. The real doctrine of likelihood of bias would also not be applicable in such a case. The decision was taken collectively by a responsible body in terms of its constitutional functions. To repeat only in a case of apparent bias , the exception to the general rule would apply. On the same analogy in absence of any material brought on records, it may not be possible to hold that the action on the part of the Council of Ministers was actuated by any malice. So far as plea of malice is concerned, the same must be attributed personally against the person concerned and not collectively. Even in such a case the persons against whom malice on fact is alleged must be impleaded as parties. (Paras 23 and 24)

       However, here arises another question. There are two competing orders; one of the Council of Ministers, another by the Governor, one refusing to grant sanction another granting the same. The Council of Ministers had refused to grant sanction on the premise that there existed no material to show that the Respondent No. 4 in each appeal has committed an offence of conspiracy, whereas the Governor in his order dated 24th September, 1998 was clearly of the view that the materials did disclose their complicity. (Para 25)

       The Office of the Lokayukta was held by a former Judge of this Court. It is difficult to assume that the said High Authority would give a report without any material whatsoever. We, however, do not intend to lay down any law in this behalf. Each case may be judged on its own merits. In this case, however, we are satisfied that the Lokayukta made a report upon taking into consideration the materials which were placed or received by him. When the Council of Ministers takes a decision in exercise of its jurisdiction it must act fairly and reasonably. It must not only act within the four-corners of the statute but also for effectuating the purpose and object for which the statute has been enacted. The Respondent No. 4 in each appeal are to be prosecuted under the Prevention of Corruption Act wherefor no order of sanction is required to be obtained. A sanction was asked for and granted only in relation to an offence under Section 120B of the Indian Penal Code. It is now trite that it may not be possible in a given case even to prove conspiracy by direct evidence. It was for the Court to arrive at the conclusion as regard commission of the offence of conspiracy upon the material placed on records of the case during trial which would include the oral testimonies of the witnesses. Such a relevant consideration apparently was absent in the mind the Council of Ministers when it passed an order refusing to grant sanction. It is now well-settled that refusal to take into consideration a relevant fact or acting on the basis of irrelevant and extraneous factors not germane for the purpose of arriving at the conclusion would vitiate an administrative order. In this case, on the material disclosed by the Report of the Lokayukta it could not have been concluded, at the prima-facie stage, that no case was made out. (Para 28)

       We have, on the premises aforementioned, no hesitation to hold that the decision of the Council of Ministers was ex-facie irrational whereas the decision of the Governor was not. In a situation of this nature, the writ court while exercising its jurisdiction under Article 226 of the Constitution of India as also this Court under Articles 136 and 142 of the Constitution of India can pass an appropriate order which would do complete justice to the parties. The High Court unfortunately failed to consider this aspect of the matter. If, on these facts and circumstances, the Governor cannot act in his own discretion there would be a complete breakdown of the rule of law inasmuch as it would then be open for Governments to refuse sanction in spite of overwhelming material showing that a prima-facie case is made out. If, in cases where prima-facie case is clearly made out, sanction to prosecute high functionaries is refused or withheld democracy itself will be at stake. It would then lead to a situation where people in power may break the law with impunity safe in the knowledge that they will not be prosecuted as the requisite sanction will not be granted. (Paras 30 and 31)

       (iii) ADMINISTRATIVE LAW-Administrative Power-Exercise of administrative power will stand vitiated if there is a manifest error of record or exercise of power is arbitrary-Similarly, if power has been exercised on non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. (Para 29)