Holding

The Governor may act in his own discretion to grant sanction for the prosecution of a minister where the Council of Ministers' decision is irrational or biased, and such sanction is valid under Article 163(2).

Summary

The Supreme Court examined whether the Governor of Madhya Pradesh could, in his own discretion, grant sanction for the prosecution of two former ministers despite the Council of Ministers' refusal to do so. A Lokayukta report had found prima facie evidence of corruption and conspiracy under the Prevention of Corruption Act, 1983 and IPC s.120‑B, prompting the Governor to issue a sanction under CrPC s.197. The Council of Ministers denied sanction, claiming no prima facie case, and the ministers challenged the Governor’s order. The Court held that while the Governor normally acts on the aid and advice of the Council, an exception arises when the Council’s decision is irrational or tainted by bias, allowing the Governor to act independently under Article 163(2). Consequently, the Governor’s sanction was upheld, the Council’s order set aside, and the writ petitions dismissed.

Issues considered

Can the Governor exercise discretion to grant sanction for prosecution of a minister contrary to the advice of the Council of Ministers under Article 163?
Does the doctrine of apparent bias apply to the collective decision of the Council of Ministers in refusing sanction?
Is the doctrine of necessity applicable to enable the Governor to act in such circumstances?
Was the Council of Ministers' refusal to grant sanction irrational and violative of administrative law principles?

Legislation cited

Code of Criminal Procedure, 1973s. 197
Indian Penal Code, 1860s. 120-B

Subjects

Governor discretionArticle 163sanction for prosecutionPrevention of Corruption Actbias doctrinedoctrine of necessityadministrative lawLokayukta reportCouncil of Ministers

Judgment

A MADHYA PRADESH SPECIAL POLICE ESTABLISHMENT
v.
STATE OF MAD HY A PRADESH AND ORS.
c
NOVEMBER 5, 2004

B [N. SANTOSH HEGDE, S.N. VARIA VA, B.P. SINGH, H.K. SEMA AND
S.B. SINHA, JJ.]

Constitution of India, 1950-Article 163-Sanction for prosecution of
Ministers under 1983 Act and !PC-Grant of-Council ofMinisters to aid and
C advise Governor, however Governor acting in his discretion-Propriety of-
Held: Normal rule is that the Governor is to act on the aid and advice of the
Council of Ministers and not indepe'!dently or contrary to it-However, there
are exceptions where as a matter of propriety Governor can act in his own
discretion-On basis of materials disclosed by the report of Lokayukta prima
.· D facie case made out against Ministers for prosecution-Decision of Council
of Ministers refusing to grant sanction ex-facie irrational and based on nort-
consideration of materials on record-Hence, Governor can act on his own
discretion an.d grant sanction-It is fit case for the Court to exercise its
jurisdiction under Articles 226, 136 as also 142-Articles 226, 136 and 142-
Prevention of Corruption Act, 1983-Penal Code, 1860.
E
Doctrines:

Doctrine of bias-Applicability of, against Council of Ministers refusing
to grant sanction for prosecuting Ministers-Held: There should be reasonable
ground for believing likelihood ofapparent bias-Actual bias only would lead
F to automatic disqualification-However, doctrine of 'apparent bias' is not
applicable where collective decision is required to be taken under a statute-
Constitution of India, 1950-Article 163.

Doctrine of necessity-Application of, to enable Council of Ministers to
grant sanction for prosecution-Held: Where there is apparent bias and/or
G decision of Council of Ministers is irrational and based on non-consideration
of relevant factor, doctrine of necessity is not applicable and Governor would
exercise his discretion and grant sanction-Constitution of India, 1950-Article
163.

A complaint was filed against two Ministers-respondents No.4 in both
H l~O
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. 1021

the appeals, for illegally releasing the land acquired by the Development A
Authority to its earlier owner. Lokayukta carried out a detailed enquiry
and held that a case was made out for prosecuting the Ministers under
section 13(l)(d) read with Section 13(2) of the Prevention of Corruption
Act, 1983 and section 120-B IPC. Sanction was applied for and the Council
of Ministers refused to grant sanction since no primafacie case was made B
out against the respondents. However, the Governor granted sanction for
prosecution since the materials disclosed their complicity. Aggrieved
Ministers filed Writ Petitions. Single Judge of High Court held that the
Governor could not act contrary to the aid and advice of Council of
Ministers for granting sanction for prosecuting the Ministers; that the
doctrine of bias could not be applied against the entfre Council of C
Ministers; and that the doctrine of necessity could not be invoked to enable
the Governor to act in his discretion. Division Bench of High Court upheld
the order. Hence the present appeals.

Appellant contended that normally the Governor acts on the aid and
advice of the Council of Ministers but there are cases where Governor is D
by or under the Constitution required to exercise his function or any of
them in his discretion and Article 163(2) postulates that there can be
matters where the Governor can act in his discretion even though the
Constitution has not expressly so provided; and that bias is likely to
operate in a subtle manner. E
Respondent No.4-Ministers contended that the Council of Ministers
after considering all the materials concluded that sufficient material was
not there to grant sanction; that the Governor was not an Appellate Body
and could not sit in Appeal over the decision of the Council of Ministers;
that the theory of bias is not applicable; and that the doctrine of necessity F
could be invoked to enable the Council of Ministers to take decision.

Allowing the appeals, the Court

HELD: 1.1. Under Article 163 of the Constitution, in a matter of G
grant of sanction to prosecute, the Governor is normally required to act
on the 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. Some H
1022 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R. .,.

A of the exceptions under which the Governor can act in his own discretion
are Articles 239(2), 371A(l)(b), 371A(2)(b), 371A(2)(t) and Paragraphs 9(2)
and 18(3) of the Sixth Schedule of the Constitution. However, these are
not exhaustive. [1034-H; 1035-AJ

Samsher Singh v. State of Punjab., (1974] 2 SCC 831, relied on.
B
State of Maharashtra v. Ramdas Shrinavas Nayak, [19821 2 SCC 463
and Bhuri Nath and Ors. etc. v. State of Jammu & Kashmir and Ors., (1997]
2 sec 745, referred to.

C 1.2. 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 amenable to Ministerial advice. Such a situation may be where bias
is inherent and/or manifest in the advice of the Council of Ministers. The
D 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
E has now taken a tilt to 'real danger of bias' and 'suspicion of bias' •. ·
However, if the facts and circumstances indicate bias, then the conclusion
becomes inescapable. (1035-G, H; 1036-B-C]

Kumaon Manda/ Vikas Ninag Ltd. v. Girja Shankar Pant and Ors.,
[2000] 1 SCC 182 and A. K. Kraipak v. Union of India, [1969] 2 SCC 262,
F relied on.

KirtiDeshmankarv. Union of India, (1991) 1SCC104; V.C. Shuklav.
State (Delhi Administration) (19801 Supp. SCC 249 and State of Punjab v.
_V.K. Khanna, (20011 2 SCC 330, referred to.

G Judicial Review ofAdministrative Action by de Smith, Woolf and Jowell
5th Edn. p. 527, referred to.

1.3. It cannot be said that the Governor would be sitting in Appeal
over the decision of the Council of Ministers. A Council of Ministers may
H not take a fair and impartial decision when his Chief Minister or other
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. 1023

" members of the Council face prosecution. But the doctrine of 'apparent A
bias', however, may not be applicable in a case where a collective decision
is required to be taken under a statute in relation to former ministers. In
a meeting of the Council of Ministers, each member has his own say. There
may be different views or opinions. But in a democracy the opinion of the
majority would prevail. [1036-D-E-GJ
B
1.4. In the instant case, in absence of 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, it may not be possible
to hold that the action on the part of the Council of Ministers was actuated
by any malice. The decision was taken collectively by a responsible body c
in terms of its constitutional functions. The real doctrine of likelihood of
bias would also not be applicable. The plea of malice must be attributed
personally against the person concerned and not collectively. Also the
persons against whom malice on fact is alleged must be impleaded as
parties. (1036-F-G, H; 1037-A I
D
1.5. The doctrine of necessity is not applicable to the facts of the
instant case. Certainly the Council of Ministers has to first consider grant
of sanction. It is also presumed that a high authority like the Council of
Ministers will normally act in a bonajide manner, fairly, honestly and in
accordance with law. However, on rare occasions where on facts the bias
E
becomes apparent and/or the decision of Council of Ministers is shown to
be irrationa·I and based on non-consideration of relevant factor, the
Governor would be right, on the facts of that case, to act in his own
discretion and grant sanction. (1039-D-E)

J. Mohapatra and Co. v. State of Orissa, [1984) 4 SCC 103; Institute F
of Chartered Accountants v. L.K. Ratna, [1986] 4 SCC 537; Charan Lal Sahu
v. Union of India, (1990] 1SCC613; Badrinath v. Government of Tamil Nadu,
[2000] 8 SCC 395; Election Commission ofIndia v. Dr. Subramaniam Swamy,
[1996) 4 SCC 104; State of Maharashtra v. Ramdas Shrinavas Nayak, (1982)
2 SCC 463 and State of MP. v. Dr. Yashwant Trimbak, [1996) 2 SCC 305,
referred to.
G

1.6. When the Council of Ministers takes a decision in exercise of its
jurisdiction it must.act fairly and reasonably, within the four-corners of

.... the statute but also for effectuating the purpose and object for which the
statute has been enacted. No order ofsanction is required to be obtained H
1024 SUPREME COURT REPORTS [2004) SUPP. 5 S.C.R.

A for prosecution under the Prevention of Corruption Act. A sanction was
asked for and granted only in relation to an offence under Section 120B
IPC. It is now trite that it may not be possible in a given case even to prove
conspiracy by direct evidence. 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. It was for the Court to arrive at the conclusion
B 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 of the Council of Ministers when it passed an order refusing to
grant sanction. Refusal to take into consideration a relevant fact or acting
C on the basis of irrelevant and extraneous factors not germane for the
purpose of arriving at the conclusion would vitiate l!n administrative order.
The exercise of administrative power will stand vitiated if there is a
manifest error of record or the exercise of power is arbitrary. Similarly,
if the power has been exercised on the non-consideration or non-
application of mind to relevant factors the exercise of power will be
D regarded as manifestly erroneous. [1038-B-F]

1. 7. 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 f\rticle 226 of the
E Constitution as also this Court under Articles 136 and 142 of the
Constitution can pass an appropriate order which would do complete
justice to the parties. High Court failed to consider this aspect, as such
the order is set aside. It is directed that the Order of Governor sanctioning
prosecution should be given effect to and that of the Council of Ministers
refusing to do so is to be set aside. [1038-G; 1039-Fl
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7256-7257
of 2004.

From the Judgment and Order dated l O. l.2003 of the Madhya Pradesh
High Court in L.P.A. Nos. 36 and 48 of 1999.
G
Soli J. Sorabjee, Manish Singhvi, P.H. Parekh, Sameer Parekh, D.P. ......

Monthy, Ms. Shireen and S.P. Singh, for M/s. P.H. Parekh & Co., with him
for the Appellant.

Satish K. Agnihotri, Roh it K. Singh and Amit Mishra for State of M.P.
H
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. [VARIAVA, J.] 1025

Vivek K. Tankha, Ashok K. Gupta, Farrukh Rasheed and Siddartha A
Singh Chauhan for the Respondent No. 4

The Judgment of the Court was delivered by

S.N. VARIA VA, J. Leave granted.

These Appeals are against the Judgment of the Madhya Pradesh High B
Court dated 10th January, 2003.

Briefly stated the facts are as follows:

Respondents No. 4 (in both these Appeals), i.e. Rajender Kumar Singh
and Bisahu Ram Yadav, were Ministers in the Government of M. P. A C
Complaint was made to the Lokayukta against them for having released 7.5
acres of land illegally to its earlier owners even though the same had been
acquired by the Indore Development Authority. After investigation the
Lokayukta submitted a report holding that there were sufficient grounds for
prosecuting the two Ministers under Section 13(1)(d) read with Section 13(2) D
of the Prevention of Corruption Act, 1983 and also for the offences of criminal
conspiracy punishable under Section 120-B of the Indian Penal Code. It
must be mentioned that by the time the report was given the two Ministers
had already resigned.

Sanction was applied for from the Council of Ministers for prosecuting
the two Ministers. The Council of Ministers held that there was not an iota E
of material available against both the Ministers from which it could be inferred
that they had entered into a criminal conspiracy with anyone. The Council of
Ministers thus refused sanction on the ground that no prima-facie case had
been made out against them.
F
The Governor then considered grant of sanction keeping in view the
decision of the Council of Ministers. The Governor opined that the available
documents and the evidence was enough to show that a prima-facie case for
prosecution had been made out. The Governor accordingly granted sanction
for prosecution under Section 197 of the Criminal Procedure Code.
G
Both the Ministers filed separate Writ Petitions under Articles 226 and
227 of the Constitution of India assailing the Order of the Governor. A
Single Judge of the High Court held that granting sanction for prosecuting
the Ministers was not a function which could be exercised by the Governor
"in his discretion" within the meaning of these words as used in Article 163
of the Constitution of India. It was held that the Governor could not act H
1026 SUPREME COURT REPORTS (2004] SUPP. 5 S.C.R.

A contrary to the "aid and advice" of the Council of Ministers. It was further
held that the doctrine of bias could not be applied against the entire Council
of Ministers and that the doctrine of necessity could not be invoked on the
facts of the case to enable the Governor to act in his discretion.

The Appellants filed two Letters Patent Appeals which have been
B disposed off by the impugned Judgment. The Division Bench dismissed the
Letters Patent Appeals upholding the reasoning and Judgment of the Single
Judge. It must be mentioned that the authority of this Court in the case of
State of Maharashtra v. Ramdas Shrinivas Nayak, reported in (1982) 2 SCC
463 was placed before the Division Bench. The Division Bench, however,
C held that the observations made therein may apply to the case of a Chief
Minister but they could not be stretched to include cases of Ministers.

The question for consideration is whether a Governor can act in his
discretion and against the aid and advice of the Council of Ministers in a
matter of grant of sanction for prosecution of Ministers for offences under
D the Prevention of Corruption Act and/or under the Indian Penal Code.

As this question is important, by Order dated 12th September, 2003 it
has been directed that these Appeals be placed before a Bench of five Judges.
Accordingly these Appeals are before this Bench.

Article 163 of the Constitution of India reads as follows:
E
"163. COUNCIL OF MINISTERS TO AID AND ADVISE
GOVERNOR.- (1) There shall be a Council of Ministers with the
Chief Minister as the head to aid and advise the Governor in the
exercise of his functions, except in so far as he is by or under this
Constitution required to exercise his functions or any of them in his
F discretion.

(2) If any question arises whether any matter is or is not a matter
as respects which the Governor is by or under this Constitution required
to act in his discretion, the decision of the Governor in his discretion
shall be final, and the validity of anything done by the Governor shall
G not be called in question on the ground that he ought or ought not to
have acted in his discretion.

(3) The question whether any, and if so what, advice was tendered
by Ministers to the Governor shall not be inquired into in any court."

H Mr. Sorabjee submits that even though normally the Governor acts on
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. [VARIAVA, J.) 1027

- the aid and advice of the Council of Ministers, but there can be cases where
the Governor is by or under the Constitution required to exercise his function
or any of them in his discretion. The Constitution of India expressly provides
A

for contingencies/cases where the Governor is to act in his discretion. Articles
239(2), 371A(l)(b), 371A(2)(b), 371A(2)(t) and Paragraphs 9(2) and 18(3)
of the Sixth Schedule are some of the provisions. However, merely because
the Constitution of India expressly provides, in some cases, for the Governor B
to act in his discretion, can it be inferred that the Governor can so act only
where the Constitution expressly so provides. If that were so then Sub-clause
(2) of Article 163 would be redundant. A question whether a matter is or is
not a matter in which the Governor is required to act in his discretion can
only arise in cases where the Constitution has not expressly provided that the C
Governor can act in his discretion. Such a question cannot arise in respect pf
a matter where the Constitution expressly provides that the Governor is to act
in his discretion. Article 163(2), therefore, postulates that there can be matters
where the Governor can act in his discretion even though the Constitution
has not expressly so provided.
D
Mr. Sorabjee relies on the case of Samsher Singh v. State of Punjab,
reported in [1974] 2 SCC 831. A seven Judges' Bench of this Court, inter
alia, considered whether the Governor could act by personally applying his
mind and/or whether, under all circumstances, he must act only on the aid
and advice of the Council of Ministers. It was inter alia held as follows:
E
"54. The provisions of the Constitution which expressly require
the Governor to exercise his powers in his discretion are contained in
articles to which reference has been made. To illustrate, Article 239(2)
states that where a Governor is appointed an administrator of an
adjoining Union territory he shall exercise his functions as such F
administrator independently of his Council of Ministers. The other
articles which speak of the discretion of the Governor are paragraphs
9(2) and 18(3) of the Sixth Schedule and Articles 371A(l)(b),
37IA(l)(d) and 371A(2)(b) and 371A(2)(t). The discretion conferred
on the Governor means that as the constitutional or formal head of
the State the power is vested in him. In this connection, reference G
may be made to Article 356 which states that the Governor can send
a report to the President that a situation has arisen in which the
government of the State cannot be carried on in accordance with the
provisions of this Constitution. Again Article 200 requires the
Governor to reserve for consideration any Bill which in his opinion
H'
1028 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R.

A if it became law, would so derogate from the powers of the High
Court as to endanger the position which the High Court is designed
to fill under the Constitution.

55. rn making a report under Article 356 the Governor will be
justified in exercising his discretion even against the aid and advice
B of his Council of Ministers. The reason is that the failure of the
constitutional machinery may be because of the conduct of the Council
of Ministers. This discretionary power is given to the Governor to
enable him to report to the President who, however, must act on the
advice of his Council of Ministers in all matters. In this.'context
Article 163(2) is explicable that the decision of the Governor in his
c discretion shall be final and the validity shall not be called in question.
The action taken by the President on such a report is a different
matter. The President acts on the advice of his Council of Ministers.
In all other matters where the Governor acts in his discretion he will
act in harmony with his Council of Ministers. The Constitution does
D not aim at providing a parallel administration within the State by
allowing the Governor to go against the advice of the Council of
Ministers.

56. Similarly Article 200 indicates another instance where the Governor
may act irrespective of any advice from the Council of Ministers. In
E such matters where the Governor is to exercise his discretion he must .·
discharge his duties to the best of his judgment. The Governor is
required to pursue such courses which are not detrimental to the
State."

The law, however, was declared in the following terms:
F
"154. We declare the law of this branch of our Constitution to be
that the President and Governor, custodians of all executive and other
powers under various articles shall, by virtue of these provisions,
exercise their formal constitutional powers only upon and in
accordance with the advice of their Ministers save in a few well-
G known exceptional situations. Without being dogmatic or exhaustive,
these situations relate to (a) the choice of Prime Minister (Chief
Minister), restricted though this choice is by the paramount
consideration that he should command a majority in the House, (b)
the dismissal of a Government which has lost its majority in the
House; but refuses to quit office; (c) the dissolution of the House
H
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. [VARIAVA, J.] 1029

where an appeal to the country is necessitous, although in this area A

-
the head of State should avoid getting involved in politics and must
be ised by his Prime Minister (Chief Minister) who will eventually
take the responsibility for the step. We do not examine in detail the
constitutional proprieties in these predicaments except to utter the
caution that even here the action must be compelled by the peril to B
democracy and the appeal to the House or to the country must become
blatantly obligatory. We have no doubt that de Smith's statement
(Constitutional and Administrative - law by S. A. de Smith Penguin
- Books on Foundations of law), regarding royal assent holds good
for the President and Governor in India:
c
"Refusal of the royal assent on the ground that the Monarch
strongly disapproved of a Bill or that it was intensely
controversial would nevertheless be unconstitutional. The
only circumstances in which the withholding of the royal
assent might be justifiable would be if the Government itself D
were to advise such a course - a highly improbable
contingency - or possibly if it was notorious that a Bill had
been passed in disregard to mandatory procedural
requirements; but since the Government in the latter situation
would be of the opinion that the deviation would not affect
the validity of the measure once it had been assented to, E
prudence would suggest the giving of assent"."

Thus, as rightly pointed out by Mr. Sorabjee, a seven Judges' Bench of this
Court has already held that 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 F
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 ofperil to democracy G
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.

Mr. Sorabjee also points out that this Court in the case of Ramdas
Shrinivas Nayak (supra) has carved out a further exception. In this case, an H
1030 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R.

A MLA filed a complaint against the then Chief Minister of Maharashtra in the
Court of Metropolitan Magistrate, 28th Court, Esplanade, Bombay, charging
the Chief Minister with commission of offences punishable under Sections
i 61 and 185 of tli.e Indian Penal Code and Section 5 of the Prevention of
Corruption Act. The Metropolitan Magistrate refused to entertain the complaint
B without requisite sanction of the Government under Section 6 of the Prevention
of Corruption Act. Against the Order of the Metropolitan Magistrate, R.S.
Nayak filed a Criminal Revision Application in the High Court of Bombay
wherein, the State of Maharashtra and Shri Antulay were impleaded as
Respondents. During the pendency of this Criminal Revision Application,
Shri Antulay resigned as the Chief Minister of the State of Maharashtra. A
C Division Bench of the Bombay High Court dismissed the Revision Application,
but whilst dismissing the application it was recorded by Gadgil, J. as follows:

''However, I may observe at this juncture itself that at one stage it
was expressly submitted by the learned counsel on behalf of the
respondents that in case if it is felt that bias is well apparently inherent
D iQ the proposed action of the concerned Ministry, then in such a case
situation notwithstanding the other Ministers not being joined in the
arena of the prospective accused, it would be a justified ground for
the Governor to act on his own, independently and without any
reference to any Ministry, to decide that question."
E
Kotwal, J. in his concurring judgment observed:

. "..... At one stage it was unequivocally submitted by the learned
counsel on behalf of the respondents in no uncertain terms that even
in this case notwithstanding there being no accusation against the
F Law Minister as such if the court feels that in the nature of things a
bias in favour of the respondents and against a complainant would be
manifestly inherent, apparent and implied in the mind of the Law
Minister, then in that event, he would not be·entitled to consider
complainant's application and on the equal footing even the other
Ministers may not be qualified to do so and the learned counsel
G
further expressly submitted that in such an event, it would only the
. Governor, who on his own, independently,,will be entitled to consider
that question."

The State of Maharashtra sought Special Leave to Appeal to this Court,
H under Article 136 of the Constitution of India, against that portion of the
M.P. POLICEESTABLISHMENTv. STATE OF M.P. [VARIAVA, J.] 1031

Judgment which directed the Governor of Maharashtra to exercise his A
individual discretion. Before this Court it was argued that the High Court
could not have decided that the Governor should act in his individual discretion
and without the aid and advice of the Council of Ministers. It was submitted
that under Article 163(2) if a question arose whether any matter was or was
not one in which the Governor was required to act in his discretion, it was B
the decision of the Governor which was to be final. It was also submitted that
under Article 163(3) any advice tendered by the Council of Ministers to the
Governor could not be inquired into by the Court. This Court noticed that an
express concession had been made in the High Court to the effect that in
circumstances like this bias may be apparently inherent and thus it would be
a justified ground for the Governor to decide on his own, independently and C
without any reference to any Ministry. Before this Court it was sought to be
contended that no such concession had been made out. This Court held that
public policy and judicial decorum required that this Court does not launch
into an enquiry whether any such concession was made. It was held that
matters of judicial records are unquestionable and not open to doubt. It was D
held that this Court was bound to accept the statement of the Judges recorded
in their Judgment, as to what transpired in Court. This Court then went on
to hold as follows:

"10. We may add, there is nothing before us to think that any
such mistake occurred, nor is there any ground taken in the petition E
for grant of special leave that the learned Judges proceeded on a
mistaken view that the learned counsel had made a concession that
there might arise circumstances, under which the Governor ii: granting
sanction to prosecute a minister must act in his own discretion and
not on the advice of the Council of Ministers. The statement in the F
judgment that such a concession was made in conclusive and, if we
may say so, the concession was rightly made. In the facts and
circumstances of the present case, we have no doubt in our mind that
when there is to be a prosecution of the Chief Minister, the Governor
would, while determining whether sanction for such prosecution should
be granted or not under Section 6 of the Prevention of Corruption G
Act, as a matter of propriety, necessarily act in his own discretion
and not on the advice of the Council of Ministers.

11. The question then is whether we should permit the State of
Maharashtra to resile from the concession made before the High Court H
and raise before us the contention now advanced by the learned
1032 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R.

A Attorney-General. We have not the slightest doubt that the cause of
justice would in no way be advanced by pennitting the State of
Maharashtra to now resile from the concession and agitate the question
posed by the learned Attorney-General. On the other hand we are
satisfied that the concession was made to advance the cause of justice
as it was rightly thought that in deciding to sanction or not to sanction
B
the prosecution of a Chief Minister, the Governor would act in the
exercise of his discretion and not with the aid and advice of the
Copncil of Ministers. The application for grant of special leave is,
therefore, dismissed."

c (Emphasis supplied)

As has been mentioned above, the Division Bench had noted this case.
The Division Bench however held that even though this principle may apply
to the case of a Chief Minister it cannot apply to a case where Ministers are
sought to be prosecuted. We are unable to appreciate the subtle distinction
D sought to be made by the Division Bench. The question in such c'ises 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
E of real likelihood of bias has now taken a tilt to 'real danger of bias'. and
'suspicion of bias'. [See Kumaon Manda/ Vikas Ninag Ltd v. Gilja Shankar
Pant and Ors., reported in [2000] l SCC 182 paras 27, 33 and 35 and
Judicial Review of Administrative Action, by de Smith, Woolf and Jowell
(5th Edn. at p.527) where two different spectrums of the doctrine have been
F considered].

Another exception to the aforementioned general rule was noticed in
Bhuri Nath and Ors etc. v. State of Jammu & Kashmir and Ors., reported in
[1997] 2 SCC 745, where the Governor was to chair the Board in tenns of
the Jammu and Kashmir Shri Mata Vaishno Devi Shrine Act, 1988 on the
G premise that in terms of the statute he is required to. exercise his ex officio
power as Governor to oversee personally the administration, management
and governance of the Shrine. It was observed that the decision taken by him
would be his own on his personal satisfaction and not on the aid and advice
of the Council of Ministers opining:

H " ... The exercise of powers and functions under the Act is distinct and
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. [V ARIAVA, J.] l 033

different from those exercised formally in his name for which A
responsibility rests only with his Council of Ministers headed by the
Chief Ministers."

In the case of A. K. Kraipak v. Union of India, reported in [1969] 2
SCC 262, the question was whether a selection made by the Selection Board
could be upheld. It was noticed that one of the candidates for selection had B
become a member of the Selection Board. A Constitution Bench of this Court
considered the question of bias in such situations. This Court held as follows:

"15. It is unfortunate that Naqishbund was appointed as one of
the members of the selection board. It is true that ordinarily the Chief C
Conservator of Forests in a State should be considered as the most
appropriate person to be in the selection board. He must be expected
to know his officers thoroughly, their weaknesses as well as their
strength. His opinion as regards their suitability for selection to the
All India Service is entitled to great weight. But then under the
circumstances it was improper to have included Naqishbund as a D
member of the selection board. He was one of the persons to be
considered for selection. It is against all canons of justice to make a
man judge in his own cause. It is true that he did not participate in
the deliberations of the committee when his name was considered.
But then the very fact that he was a member of the selection board E
must have had its own impact on the decision of the selection board.
Further admittedly he participated in the deliberations of the selection
board when the claims of his rivals particularly that of Ban was
considered. He was also party to the preparation of the list of selected
candidates in order of preference. At every stage of his participation
in the deliberations of the selection board there was a conflict between F
his interest and duty. Under those circumstances it is difficult to
believe that he could have been impartial. The real question is not
whether he was biased. It is difficult to prove the state of mind of a
person. Therefore what we have to see is whether there is reasonable
ground for believing that he was likely to have been biased. We agree G
with the learned Attorney-General that a mere suspicion of bias is not
sufficient. There must be a reasonable likelihood of bias. In deciding
the question of bi(!s we have to take into consideration human
probabilities and ordinary course of human conduct. It was in the
interest of Naqishbund to keep out his rivals in order to secure his H
position from further challenge. Naturally he was also interested in
1034 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R.

A safeguarding his position while preparing the list of selected candidates.

16. The members of the selection board other than Naqishbund,
each one of them separately, have filed affidavits in this Court ~wearing
that Naqishbund in no manner influenced their decision in making
the selections. In a group deliberation each member of the group is
B bound to influence the others, more so, if the member concerned is
a person with special knowledge. His bias is likely to operate in a
subtle manner. It is no wonder that the other members of the selection
board are unaware of the extent to which his opinion influenced their
conclusions. We are unable to accept the contention that in adjudging
C the suitability of the ·candidates the members of the board did not
have any mutual discussion. It is not as if the records spoke of
themselves. We are unable•to believe that the members of selection
board functioned like computers. At this stage it may also be noted
that at the time the selections were made, the members of the selection
board other than Naqishbund were not lil:ely to have known that
D Basu had appealed against his supersession and that his appeal was
pending before the State Government. Therefore there was no occasion
for them to distrust the opinion expressed by Naqishbund. Hence the
board in making the selections must necessarily have given weight to
the opinion expressed by Naqishbund."
E
On the basis of the ratio in this case Mr. Sorabjee rightly contends that
bias is likely to operate in a subtle manner. Sometime members may not even
be unaware of the extent to which their opinion gets influenced.

Again in the case of Kirti Deshmankar v. Union of India, reported in
F [1991] I sec 104, the mother-in-law of the selected candidate had participated
in the Selection Committee. This Court held that the mother-in-law was vitally
interested in the admission of her daughter-in-law and her presence must be
held to hav~ vitiated the selection for the "admission. It was held that there
was a conflict between interest and duty and taking into consideration human
G probabilities and the ordinary course of human conduct, there was reasonable
ground to believe that she was likely to have been biased.

Article 163 has been extracted above. Undoubtedly, in a matter of grant
of sanction to prosecute the Governor is nonnally required to act on aid and
advice of the Council of Ministers and not in his discretion. However, an
·H exception may arise whilst considering grant of sanction to prosecute a Chief
M.P. POLICE ESTABLISHMENT v. STATE OF M.P. [VARIAVA, J.] ] 035

Minister or a Minister where as a matter of propriety the Governor may have A
to act in his own discretion. Similar would be the situation if the Council of
Ministers disable itself or disentitles itself.

Mr. Tankha, on behalf of the Ministers, submitted that a case of Chief
Minister would be completely different from that of Ministers. He submitted
that in this case the Council of Ministers had considered all the materials and B
had applied their minds and· come to the conclusion that sufficient material
to grant sanction was not there. He submitted that the Governor was not an
Appellate Body and he could not sit in Appeal over the decision of the
Council of Ministers. He submitted that the decision of the Council of Ministers
could only have been challenged in a Court of Law. C
Mr. Tankha submitted that the theory of bias cannot be applied to the
facts of this case. In support of his submission, he relied upon the case of
V.C. Shukla·v. State (Delhi Administration), reported in (1980] Supp. SCC
249, wherein the vires of the Special Court Act, 1979 had been challenged.
Under Section 5 of the Special Court Act, sanction had to be granted by the D
Central Government. Sub-section (2) of Section 5 provided that the sanction
could not be called in question by any Court. It had been submitted that this
would enable an element of bias or malice to operate by which the Central
Government could prosecute persons who are political opponents. This Court
negatived this contention on the ground that the power was vested in a very
high authority and therefore it could not be assumed that it was likely to be E
abused. This Court held that as the power was conferred on a high authority
the presumption would be that the power would be exercised in a bonajide
manner and according to law. Mr. Tankha also relied upon the case of State
of Punjab v. V.K. Khanna, reported in [2001] 2 SCC 330. In this case, two
senior IAS Officers in the State of Punjab were sought to be prosecuted after F
obtaining approval from the then Chief Minister of Punjab. Thereafter, there
was a change in the Government. The new Government cancelled the sanction
granted earlier. The question before the Court was whether the action in
withdrawing the sanction was fair and correct. This Court held that fairness
was synonymous with reasonableness and bias stood included within the
attributes and broader purview of the word "malice". This Court held that G
mere general statements were not sufficient but that there must be cogent
evidence available to come to the conclusion that there existed a bias which
resulted in a miscarriage of justice. Mr. Tankha also relied upon the case of
Kumaon Manda/ Vikas Nigal Ltd. v. Girja Shankar Pant, reported in [2001]
l SCC 182. In this case, the question was whether the Managing Director had H
1036 SUPREME COURT REPORTS [2004) SUPP. 5 S.C.R.

A a bias against the Respondent therein. This Court held that mere apprehension ·
of bias was not sufficient but that there must be real danger of bias. It was
held that the surrounding circumstances must and ought to be collated and
necessary conclusion drawn therefrom. It was held that if on facts the
conclusion was otherwise inescapable that there existed a real danger of bias,
B the administrative action could not be sustained. It was held that if, on the
other hand, the allegations pertaining to bias are rather fanciful, then the
question of declaring them to be unsustainable would not arise.

There can be no dispute with the propositions of law. However, in our
view, the above authorities indicate that ifthe facts and circumstanc~s indicate
C bias, then the conclusion becomes inescapable.

Mr. Tankha is not right when he submits that the Governor would be
sitting in Appeal over the decision of the Council of Ministers. However, as
stated above, unless a situation arises as a result whereof the Council of
Ministers disables or disentitles itself, the Governor in such matters may not·
D have any role to play. Taking a cue from Antulay, it is possible to contend
that a Council of Ministers may not take a fair and impartial decision when
his Chief Minister or other members of the Council face prosecution. But the
doctrine of 'apparent bias', however, may not be applicable in a case where
a collective decision is required to be taken under a statute in relation to
former ministers. In a meeting of the Council of Ministers, each member has
E his own say. There may be different views or opinions. But in a democracy
the opinion of the majority would prevail.

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
F 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.
G
On the same analogy in abs.ence 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
H
M.P. POLICE ESTABLISHMENTv. STATE OF M.P. (VARIAVA, J.) 1037

alleged must be impleaded as parties. A
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, B
whereas the Governor in his order dated 24th September, 1998 was clearly
of the view that the materials did disclose their complicity.

A F.I.R. was lodged in relation to the commission of offence on 31st
March, 1998.
c
The Lokayukta for the State of Madhya Pradesh admittedly made a
detailed inquiry in the matter on a complaint received by him. The inquiry
covered a large area, namely, the statutory provisions, the history of the case,
Orders dated I Ith August, 1995, 24th February 1997 and 5th March, 1997
which were said to have been passed on the teeth of the statutory provisions, D
the clandestine manner in which the matter was pursued, the notings in the
files as also how the accused persons deliberately and knowingly closed their
minds and eyes from the realities of the case. The report of the Lokayukta
is itself replete with the materials which led him to arrive at the conclusion
which is as under:
E
"Having gone through the record of the IDA and the State
Government and the statements recorded by Shri P.P. Tiwari and the
replies of the two Ministers Shri B.R. Yadav and Shri Rajendra Kumar
Singh and Shri R.D. Ahirwar the then Additional Secretary,
Department of Environment, I have come to the conclusion that this
is a fit case in which an offence should be registered. Therefore, in F
exercise of the powers vested in me u/s 4(1) of the M.P. Special
Police Establishment Act, I direct the D.G. (SPE) to register and
investigate an offence against Shri B.R. Yadav, Minister, Shri Rajendra
Kumar Singh, Minister and Shri R.D. Ahirwar the then Additional
Secretary under relevant provisions of the P.C. Act, 1988 and l.P.C. G
It is also directed that investigation in this case will be done by an
officer not below the rank of S.P. The entire record be transferred
to the SPE Wing."

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 H
1038 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R.

A 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
B act fairly and reasonably. It must not only act within the four-comers 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
C 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 testimpnies 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-
D 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. ·
E
It_ is well-settled that the exercise of administrative power will stand
vitiated if there is a manifest error of record or the exercise of power is
arbitrary. Similarly, ifthe power has been exercised on the non-consideration
or non-application of mind to relevant factors the exercise of power will be
regarded as manifestly erroneous.
F
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
G 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
H · inasmuch as it would then be open for Governments to refuse sanction in
M.P. POLICE ESTABLISHMENT v. STA TE OF M.P. [VARIAVA, J.] 1039

spite of overwhelming material showing that a prima-facie case is made out. A
If, in cases where prima-faci'e 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.
B
Mr. Tankha also pressed into play the doctrine of necessity to show that
in such cases of necessity it is the Council of Ministers which has to take the
decision. In support of this submission he relied upon the cases of J. Mohapatra
and Co. v. State of Orissa, reported in [ 1984] 4 SCC 103; Institute ofChartered
Accountants v. L.K. Ratna, reported in [1986] 4 SCC 537; Charan Lal Sahu C
v. Union of India, reported in [1990] (1) SCC 613; Badrinath v. Government
of Tamil Nadu, reported in [2000] 8 SCC 395; Election Commission of India
v. Dr. Subramaniam Swamy, reported in [1996] 4 SCC 104; Ramdas Shrinavas
Nayak (supra) and State of MP. v. Dr. Yashwant Trimbak reported in [1996]
2 SCC 305. In our view, the doctrine of necessity has no application to the
facts of this case. Certainly the Council of Ministers has to first consider D
grant of sanction. We also presume that a high authority like the Council of
Ministers will normally act in a bonajide manner, fairly, honestly and in
accordance with law. However,-on those rare occasions where on facts the
bias becomes apparent and/or the decision of Council of Ministers is shown
to be irrational and based on non-consideration of relevant factor, the Governor E
would be right, on the facts of that case, to act in his own discretion and grant
sanction.

In this view of the matter, the appeals are allowed. The decisions of the
Single Judge and Division Bench cannot be upheld and are accordingly set
aside. The Writ Petitions filed by the two Ministers will stand dismissed. For F
the. reasons aforementioned we direct that the Order of the Governor
sanctioning prosecution should be given effect to and that of the Council of
Ministers refusing to do so may be set aside. The Court shall now proceed
with the prosecution. As the case is very old, we request the Court to dispose
off the case as expeditiously as possible.

N.J. Appeals allowed.