Holding

The order was a detailed, reasoned decision and complied with the requirements of natural justice; therefore, the appeal was dismissed.

Summary

The Ossein and Gelatine Manufacturers' Association appealed to the Supreme Court against the Central Government’s order granting Modi Alkalies and Chemicals Ltd permission to set up an ossein and gelatine plant in Rajasthan under Section 22 of the Monopolies and Restrictive Trade Practices Act, 1969. The Association claimed the order was unreasoned, violated natural justice, and was passed by an officer different from the one who heard the case. The Court examined whether the order provided sufficient reasons and whether the procedural fairness requirements of natural justice were met. It found the order detailed the parties’ contentions, addressed them seriatim, and gave weight to economic advantages such as setting up the industry in a backward area and export commitments. The Court held that the order was adequately reasoned and that the hearing, though not before the same officer, satisfied natural‑justice requirements, with no prejudice to the Association. Consequently, the appeal was dismissed.

Issues considered

Whether the Central Government’s order granting permission under Section 22 of the MRTP Act was a reasoned order as required by law.
Whether the principles of natural justice, including the rule that the officer who hears must decide, were violated.
Whether the delay between the hearing and the issuance of the order vitiated the order.

Legislation cited

Monopolies and Restrictive Trade Practices Act, 1969s. 21, s. 22, s. 23, s. 55

Subjects

Monopolies and Restrictive Trade Practices Actreasoned ordernatural justiceadministrative lawSection 22Section 55industrial licensingappeal dismissed

Judgment

OSSEIN AND GELATINE MANUFACTURERS'
A
ASSOCIATION OF INDIA
v.
MODI ALKALIES AND CHEMICALS LTD. & ANR.

AUGUST 10, 1989
B
[SABYASACHT MUKHARJI ANDS. RANGANATHAN, Ji.)

Monopolies and Restrictive Trade Practices Act, 1969: Sections
21, 22 and 23-Granting of applications-Central ·Government bound
to give reasoned orders-To appraise evidence or review such reasoned
conclusions-Not within the province of Courts. ·
c
Respondent No. 1 made an application to the Central Government
for permission to establish an nndertaking for the manufacture of
Ossein and Gelatine in the State of Rajasthan. The appellant Associa-
tion made representations before the Central Government objecting to
the grant of the said application inter alia on the ground that it would D
cripple the small scale business of its members, who were already func-
tioning far below capacity on accoudt of short supply of crushed bones.
The Central Government rejected the objections and granted the appli-
cation of the Respondent, under .·section 22 of the Monopolies and
\ Restrictive Trade Practices Act, by its order dated 20.9.1988.
Aggrieved by the said order, appellant association has preferred this E
appeal under section 55 Mthe MRTP Act. -

On behalf of the appellant, it was contended that the Central
Government has failed to pass a reasoned order and has. not followed
tpe principles of natural justice.
F
Dismissing the appeal,

HELD: 1. The order of the Government is a detailed and elabo-
rate one. It sets ont the contentions and deals with them seriatim. The
point made that existing units·were already functioning below capacity
due to insufficient supply of crushed bones and that the entry of the G
Respondent No.· 1 into the arena would drive them out of business has
not. been overlooked. Only, as against this, the Government has con-
sidered to be more weighty the economic advantages in granting the
application of Respondent No. 1 arising out of the circumstances that
they would be setting up the industry in a backward area; that they had
categorically undertaken to export at least 60% of their proposed pro- H
815
'l!

816 SUPREME COURT REPORTS [1989] 3 S.C.R.

A duction; that since they would be producing their own hydrochloric
acid, the availability of such acid to others will not be affected; and that
the short supply of the raw material (crushed bones) may not be a
I-
constraint for permitting the manufacture of value-added products like
Ossein and Gelatine. The order bears testimony to the fact that the pros
and cons have been fully considered and a decision taken. It is Bot
B within the province of the Courts to appraise the evidence or review the
conclusion of the Government. [818G-H; 819A-B]

Oramco Chemicals Pvt. Ltd. v. Gwalior Rayon Silk Manufactur-
ing (Weaving) Company Ltd. & Anr., [1987] 2 SCC 620 and Bombay
Oil Industries v. Union of India, [1984] 1SCR815, referred to. ·5-(
c 2. In the instant case, requirements of natural justice have been
fulfilled and no prejudice has been caused to the appellant. Of course
the order has been passed by an officer different from the one who
heard the parties. However, the proceedings were not i,; the nature of
.
formal judicial hearings. They were in the nature of meetings and full
D minutes were recorded of all the points discussed at each meeting. The
order itself summarises and deals with all the important objections. The
delay in the passing of the order also does not viti!'te the order in the
absence of any suggestion that there has been a change of circumstances
in the interregnum brought to the notice of the authorities or that the
authority passing the order has forgotten to deal with any particular
aspect by reason of such delay. The contention that the application of
Respondent No. 1 had referred to bonemeal as the raw material used
aud this was later changed to 'crushed bones' is pointless because it is
not disputed that all along the appellant was aware that the reference to
bonemeal was incorrect and that Respondent No. 1 was going to use
crushed bones in the project. That some documents were produced at
the hearing by Respondent No. 1 which the appellant could not deal
with effectively is also without force as, admittedly, the appellant's
representatives were shown those documents but they did not seek any
time for considering them and countering their effect. Moreover, the
issue is one of grant of approval by the Government and not any
particular officer statutorily designated. It is also perfectly clear on the
G records that the officer who passed the order has taken full note of all
the objections put forward by the petitioners. [819C~H; 820A-D l . I
..!,,

CIVIL APPELLATE JURISDICTION: Civil Appeal No.
27(NM) of 1989.

H From the Judgment and Order dated 20.9.88 of the Government
OSSEIN MFR. ASSCN. v. MODI ALKALIES (RANGANATHAN, J.] ·8f7'
of India, Ministry of Industry, Department of Company Affairs,
Shastri Bhavan, New Delhi in No. 2/51/85-M-II. A

Anil B. Divan, Nitin Thakkar, P.H. Parekh and S. Dogra for the
Appellant.
'{ Anil Dev Singh, H. Sharma, Sushma Suri, Harish Salve, Mohini B
Sud and Praveen Kumar for the Respondents.

The Judgment of the Court was delivered by
~
RANGANATHAN, J. 1. This appeal has been preferred under

f section 55 of the Monopolies & Restrictive Trade Practices Act ('the
Act') from an order of the Central Government (C.G.) dated 20.9.88. c
By the said order the C.G. granted an application made by respondent
No. 1 (hereinafter referred to as 'the Modis') under section 22 of the
Act for permission to establish an undertaking for the manufacture of
O~sein and Gelatine in the State of Rajasthan. The petitioner, which
claims to be an association of Ossein and Gelatin manufacturers in D
India, m_ade representations before the C.G. objecting to the grant of
the application by the Modis. These objections having been rejected
--.{ and the application granted by the said order, the aggrieved petitioner
has preferred this appeal. We admit the appeal and, having heard
'
counsel on both sides, proceed to dispose of the appeal finally.
E
·2. The following contentions have been urged by Sri Divan in
support of the appeal:

(a) The order dated 20.9.88 is vitiated as it merely sets out the

--· bald conclusion of the officer concerned. It is not a reasonbd or
well considered order. F

(b) The appellant had pointed out that the grant of permission to
~odis would be against public interest. It would completely crip-
pie the small scale business of the members of the apellant
association which, even earlier, had been functioning far below
capacity due to insufficient supply of c_,ushed bones. These G
} objections had not been properly dealt with in the order.

(c) The order has been passed by one Sri Vijayaraghavan
whereas a personal oral hearing in the matter had been given by
Sri S.S. Khosla. This has resulted in the violation of the funda-
mental rule of natural justice that "he who hears must decide". H
818 SUPREME COURT REPORTS [1989] 3 S.C.R.
A.
(d) The hearing had taken place on 23.1.86 while the final order
A
was passed more than two and half years later. This, coupled
with the change in personnel referred to above, has resulted in
the denial of natural justice to the petitioner.

( e) Modis had stated in their application that bonemeal would
B be the raw material used by them but, later, they changed it into
"crushed bones". The appellant had no opportunity of meeting
the new case.

(f) The representative of Modis had presented certain docu- -).{
ments at the personal hearing but copies thereof had not been
supplied to the appellant despite a grievance made by it the very
c next day.
A

The appellant's contentions broadly fall under two heads: one,
the denial of natural justice and two, the failure to pass a reasoned
order. It will be convenient to deal with the latter objection first.
D
We are unable to accept the appellant's contention that the
impugned order is bald, unreasoned or cryptic and violates the
requirements for such an order enunciated in the Oramco case [1987] 2
SCC 620, where this Court reaffirmed the following observations made >-
in the Bombay Oil case [1984] 1SCR815:
E
"We must, however, impress upon the Government that
while disposing of applications under Sections 21, 22 and 23
of the Monopolies and Restrictive Trade Practices Act,
1969, it must give good reasons in support of its order and .,._ ~

not merely state its bald conclusion. The faith of the people (

F in administrative tribunals can be sustained only if the
tribunals act fairly and dispose of matters before them by
well considered orders ..... "

The order of the Government is a detailed and elaborate one. It sets
out the contentions and deals with them seriatim. The point made that
G existing units were already functioning below capacity due to insuffi-
cient supply of crushed bones and that the entry of the Modis into the ;.

arena would drive them out of business has not been overlooked.
Only, as against this the Government has considered to be more
weighty the economic advantages in granting the application of the
Modis arising out of the circumstances: (a) that they would be setting
H up the industry in a backward area; (b) that they had categorically
OSSEIN MFR. ASSCN. v. MODI ALKALIES (RANGANATHAN, J.] 819
)
undertaken to export at _least 60% of their proposed production; (c)
that since they would be producing their own hydrochloric acid, the A
availability of such acid to others will not be affected; and (d) that the
short supply of the raw material (crushed bones) may not be a con-
straint for permitting the manufacture of·value-added products•like
Ossein and Gelatine. The order bears testimony to the fact that the
pros and cons have been fully considered and a decision taken. It is not
B
_within the province of the Courts to appraise the evidence or review
the conclusion of the Government. The first branch of the argument of
the counsel for the appellant, therefore, fails.

On the issue of natural justice, we are satisfied that no prejudice
has been caused to the appellant by any of the circumstances pointed
out by the appellant. It is true that the order has been passed by an c
officer different from the one who heard the parties. However, the
i proceedings were not in the nature of formal judicial hearings. They
were in the nature of meetings and full minutes were recorded of all
the points discussed at each meeting. It has not been brought to our
notice that any salient point urged by the petitioners has been missed.
D
On the contrary, the order itself summarises and deals with all the
important objections of the petitioners. This circumstance has not,
therefore, caused any prejudice to the petitioners. The delay in the
passing of the order also does not, in the above circumstances, vitiate
the order in the absenc of any suggestion that there has been a change
of circumstances in the interregnum brought to the notice of the
E
authorities or that the authority passing the order has forgotten to deal
with any particular aspect by reason of such delay. The argument that
the application of the Modis had referred to bonemeal as the raw
material used and this was later changed to "crushed bones" is point-
less because it is not disputed that all along the petitioners were aware
that t,he reference to bonemeal was incorrect and that the Modis were
F
going to use crushed bones in their project. The last contention that
some documents were produced at the hearing by the Modis which the
petitioners could not deal with effectively is also without force as,
admittedly, the assessee's representatives were shown those docu-
ments but did not seek any time for considering them and countering
I their effect. There has, therefore, been in fact, no prejudice to the
G
). petitioners. They have had a fair hearing and the Government's deci-
sion has been reached after consi"dering all the pros and cons. We are
unable to find any ground to interfere therewith.

There was some discussion before us on a larger question as to
whether the requirements of natural justice can be said to have been
~ H
\
820 SUPREME COURT REPORTS [1989] 3 S.C.R.

A complied with where the objections of parties are heard by one officer
but the order is passed by another. Sri Salve, referring to certain
passages in Local Government Board v. A/ridge, (1915] A.C. 120;
Ridge v. Baldwin, [1964] A.C. 40; Regina v. Race Relations Board, Ex
parte Selvarajan, [1975] 1WIR1686 and in de Smith's Judicial Review of
Administrative Action, Fourth Edn. p. 219-220 submitted that this was
B
not necessarily so and that the contents of natural justice will vary with
the nature of the enquiry, the object of the proceeding and whether
the decision involved is an "institutional" decision or one taken by an
officer specially empowered to do it. Sri Divan, on the other hand,
pointed out that the majority judgment in Gullappalli Nageswara Rao
v. APSR TC, [1959] Supp. 1SCR319 has disapproved of A/ridge's case
c and that natural justice demands that the hearing and order should be
by the same officer. This is a very interesting question and A/ridge's
case has been dealt with by Wade (Administrative Law, 6th Edition at
pp. 507 et seq.) We are of opinion that it is unnecessary to enter into a
decision of this issue for the purposes of the present case. Here the
issue is one of grant of approval by the Government and not any
D particular officer statutorily designated. It is also perfectly clear on the
records that the officer who passed the order has taken full note of all
the objections put forward by the petitioners. We are fully satisfied,
therefore, that the requirements of natural justice have been fulfilled
in the present case.
E For the reasons stated above, the appeal stands dismissed. No
costs.

G.N. Appeal dismissed.