Universal Music India Ltd. And v. Union Of India

Estimated Reading Time: 11 minutes

CITATION: [2008] 87 SCL 51 (DELHI)

Introduction

Natural justice means to make a practical and balanced inference-making procedure on a specific interrogation. Natural justice is a doctrine that proposes to ensure rule with justice & to secure fairness. So, the doctrine of Natural Justice is made to safeguard that the ending processes are clear & impartial, and are also based on evidence and hence should be reasonable. The right to a judicious hearing needs that individuals should not be punished by conclusions disturbing their rights especially their fundamental rights unless it is complete according to all the dealings recognized by the law in Article 21[1] of the Constitution of India, that means they should be given preceding notice of the matter and definitely a reasonable opportunity to answer and current their own case. The aim of the doctrine of natural justice is the inhibition of the loss of natural justice. Natural Justice is significant because it safeguards procedural fairness and also reasonable decision making.

With respect to the principle of Article 14[2] of the Constitution also protects the doctrine of natural justice which contains both the principles of ‘Audi alteram partem’ and ‘Nemo judex in causa sua’. The article pledges all countries equivalence before the law and equal protection of the law. It discourages any form of discrimination and prohibits both discriminatory laws and managerial achievement.

Article 311[3]  of the Constitution also includes many of the structures of natural justice without directly declaring it such that Clause 2 of the Article clearly discusses that no individual can be unconcerned or discharged or can be abridged in his rank in which he has been allotted to accepting after an investigation.

The violation of doctrine of natural justice is also the violation of the right to equality. If the court of law doesn’t reject its role in a just and fair method the rule of law would miss its legitimacy and so to defend it there are penalties such as the banning of a judge just so that people don’t drop their optimism in the court of law and in the fairness. The truth is that the word justice in this country is a very extravagant start. Applying all the values of natural justice in cases stated above and all the cases connected to that were accepted within the exercise of statutory power but were against the natural justice & were perceived again. Principles of Natural Justice is never straightforward mentioned in the Indian Constitution but is indirectly mentioned as is there in Article 14, Article 226, Article 227, Article 311 etc. 

Facts

The Indian Performing Rights Society was consolidated on the 23rd August 1969 as a corporation restricted by guarantees, having no shared resources. In 1996, this company was designated as a copyright organisation under Section 33 of the Copyright Act, 1957, with the object of carrying out copyright market regarding literary and musical copyrights in musical compositions.

It is asserted to have 1413 divisions divided into four broad classes consisting of songwriters (367 members), authors (532 members), film yielders (188 members), and music corporations (171 members). Apart from these, 155 segments were told to be legal heirs of certain deceased songwriters and composers.

Affirming that the community was constituted and is obliged to perform in terms of the dictates of the Apex Court in Indian Performing Right Society v. Indian Motion Pictures Association[4] and the improvements made to the Copyright Act, 1957 with impact from 10th May 1995, it is disputed that the respondent is not so working. A discussion was even compelled to remove the petitioners from the ruling council, the board of directors of the society.

In these situations, the petitioners believed that the Company Law Board be demanded to execute its jurisdiction beneath Section 397, 398 and 402 of the Companies Act, 1956[5] regarding the Indian Performing Rights Society Ltd.’s functioning.

Arguments Of Petitioner

The petitioners are music corporations supporting business, creating, publishing and purchasing music albums, cassettes and compact disks. The petitioners attack the respondents’ order and performance in requiring them to help on the other side a copy of their application under Section 399(4) inquiring leave to keep a petition under Section 397 and 398 of the Companies Act. The petitioners argue that they are not needed to serve notice or grant a hearing on such an application to the organisation against whom the petitioner asks permission to inaugurate such operations. The petitioners maintain that they are amongst the prime six music companies which are members of the society. The petitioners contend that it has been registered to their authorised representative that upon conclusion of service and pleading, there would be a full-fledged performance of the application to resolve whether the same should be imparted or not. Aggrieved by this frightening action and the respondents’ requirement to complete a copy of society, the petitioners have filed the present writ petition.

Issues Raised 

Whether the order and Action of the respondents pursues to develop the obligation of obedience of doctrines of natural justice to exercise of virtuously managerial jurisdiction which outcomes in no public consequences. 

Arguments Of Respondent

 On the other hand, Mr. Rajiv Shakdhar, who was learned counsel appearing for the respondents, has rejected the writ petition on the basis that the constitutional statements noticed hereinabove must be released on the ground that they are per in curium for the ground that they do not take into the record about ongoing the verdicts of the Supreme Court proclaimed at State of Orissa v. Binapani Dei [6] and A.K. Kraipak and Ors. v. UOI and Ors[7]. According to the respondents, the Supreme Court has operated that source of natural justice concern to all administrative actions and that since the advantages of the company are severely produced in the case, the authority is given to a member to file an appeal under Section 397 and 398, crash to perform would result in a violation of principles of natural justice and subsequently appear in the failure of consideration.

The very contentions raised by the respondents justifying compliance of natural justice principles and hearing to the company before passing an order under Section 399 (4) are concerned, fell for consideration on identical contentions that were urged before this Court.

Summary Of Judgement

In the knowledge of the above stated well-settled legal laws, therefore, the expanse of analysis before the central government in Section 399 (4) is irrational. It is handling official or legislative authorities and does not operate in a constitutional or a quasi-judicial ability. 

It is not the main performance but a secondary procedure.

The expanse of compensation has to be observed in the recipient and analyses for including Section 399 (1) and Section 399 (4).

 The government is obliged to have only introductory attention to the purpose intended to be made by the member under Section 397 and 398 with a view to see whether the application can be said to be a frivolous one by a disappointed member. The petitioners are assumed to have provided all the knowledge required to be provided under Rule 13 afore-noticed.

 Very little investigation is required to know whether the same is a superficial application. An application without benefits would not significantly be frivolous, and the scrutiny by the Central Government does not include any decision of the merits of the case.

 The application of the petitioner under Section 399(4) is yet to be determined by the respondent.

Accordingly, the writ petition is approved. In view of the position in law discussed hereinabove, there can be no obligation of the Petitioners to complete a copy upon the corporation concerned, and as such, the direction made in the letter dated 19th January 2005 is hereby set aside and quashed.

Subsequently, the Central Government is compelled to consider and make relevant orders on the application of the petitioners under Section 399 (4) of the Companies Act, 1956[8] within a duration of eight weeks from today without entering the special company in its attention and after acquiescence of Rule 13 of the Companies (Central Government) General Rules and Firms, 1956 and any other lawful provision, rule or regulation. Orders established in this account shall be transferred to the petitioner within the above stated time.

This writ petition is allowed in the above courses. There shall be no order as to costs.

Analysis

Before this Court, Mr. Shakdhar learned counsel for the respondent has proposed that in the Supreme Court’s light in Dr. Binapani’s case and A.K. In Kraipak’s case (supra), the necessity to comply with the principles of natural justice is necessary. The principles directing the compliance principles of natural justice in executive development and judicial function have fallen for concern in several following Apex Court judgments and are now well settled. The Apex Court has clearly described the objections to the need for exceptions to natural justice principles. Given the submission made on behalf of the respondent, it becomes necessary to examine them in detail.

In cases of the administration seeking to denounce a contractor, it has been upheld by the Apex Court that agreement with the principles of natural justice is a need, even if the rules do not so propose. It was held in Southern Painters v. Fertilizers and Chemicals Travancore Ltd[9]. This was so because the effect of the order has severe consequences to the contractor.

The Court placed faith in these policies in the Union of India and Ors. v. Ex-constable Amrik Singh[10], upon payment of the sanctioned system and legislative purpose, the Apex Court held that the government which motivated of a post-confirmation appeal under the Border Security Force Act, 1968 and laws made thereunder is not a court and every order passed administratively cannot be controlled to the rigours of doctrines of natural justice.

In the case of Sundarjas Kanyalal Bhatija and Ors. v. Collector, Thane, Maharashtra and Ors.[11], the Apex Court needed to consider the nature of government functions in setting up a corporation under the rules established Bombay Provincial Municipal Corporation Act, 1949. The Court said that this purpose was neither executive nor authoritative. It was a legislative method. No unwritten duty is laid on the government in the discharge of the statutory duties. In the exercise of the powers to establish a Corporation, the government is not required to comply with natural justice rules any more than the legislature itself. This was because natural justice rules did not apply to legislative action, plenary or subordinate, of the government.

The selection of an arbitrator against the opposition of one of the parties on the ground that the Chief Justice had no jurisdiction or on the ground that there was no arbitration agreement, or on the ground that there was no dispute subsisting which was capable of being arbitrated upon or that the requirements for the exercise of power under Section 11(6) of the Act do not survive or that the eligibility contemplated for the arbitrator by the parties cannot be neglected and has to be carried in thought are all adjudications which concern the benefits of individuals. It cannot be assumed that when the Chief Justice determines that he has jurisdiction to proceed with the material, that there is an intervention and that one of the individuals to it has abandoned to act according to the scheme decided upon, he is not settling on the rights of the people who are putting these questions. The duty to determine the preliminary facts permitting the application of jurisdiction or authority gets all the more critical when Sub-section (7) indicates the order under Subsections (4), (5) or (6) a decision and makes the resolution of the Chief Justice final on the concerns referred to in that sub-section. Thus, going by the general origins of law and the scheme of Section 11, it is difficult to call the order of the Chief justice merely an executive order and to say that the opposite side need not even be heard before the Chief Justice employs his power of appointing a mediator. Even otherwise, when an enactment confers a power or imposes a duty on the highest judicial authority in the State or the country, that authority, unless shown otherwise, has to act judicially and has signed to examine whether his power has been correctly entreated or the conditions for the execution of his duty are shown to survive.

Conclusion

The rules of natural justice aim to secure equity or to put it negatively to prevent a miscarriage of equity. These precepts can operate only in areas not covered by any legislation validly presented. In other words, they do not supersede the rule of the land but increase it. The notion of natural justice has experienced a great chance of development in recent years. In the past, it was deemed that it involved just two laws, namely: 

(1) No individual shall be a judge in his case (Nemo debet esse judex propria causa) and (2) no decision shall be given against a party without affording him a fair hearing (Audi alteram partem). A third rule was conceived very soon after that, and quasi-judicial inquiries must be held in good faith, without bias and not arbitrarily or unreasonably. 

But in years, many more subsidiary controls came to be attached to natural justice laws. Until very recently, the courts concluded that unless the authorisation concerned was needed by the law under which it operated to act judicially, there was no room for applying the rules of natural justice. The validity of that prohibition is now questioned. 

If natural justice rules determine to prevent the miscarriage of equity, one fails to see why those rules should be made inconsistent to governmental inquiries. Oftentimes, it is not impartial to carry the principle that restricts governmental questions from quasi-judicial questions. Enquiries that were considered executive at one time are now being considered quasi-judicial. Arriving at a just conclusion is the purpose of both quasi-judicial enquiries as well as administrative examinations. An unjust judgment in an administrative enquiry may have a more far-reaching influence than a decision in a quasi-judicial enquiry. As observed by this Court in Suresh Koshy George v. The University of Kerala and Ors[12], natural justice laws are not organised rules. What appropriate rule of natural justice should apply to a given case must look to a significant amount on the facts and conditions of that case, the structure of the law under which the question is held and the constitution of the Tribunal or body of persons delegated for that purpose. Whenever a grievance is addressed before a court that some postulate of natural justice had been violated, the court has to decide whether the practice of that rule was needed for a just decision on that case’s facts.


[1] The Constitution of India, 1949, Article 21.

[2] The Constitution of India, 1949, Article 14.

[3] The Constitution of India, 1949, Article 311.

[4] Indian Performing Right Society v. Eastern India Motion Pictures , 1977 AIR 1443.

[5] The Companies Act, 1956, Section 397, 398 and 402.

[6] State of Orissa v. Binapani Dei, State Of Orissa v. Dr. (Miss) Binapani Dei & Ors, 1967 AIR 1269.

[7] A.K. Kraipak and Ors. v. UOI and Ors, AIR 1970 SC 150.

[8] The Companies Act, 1956, s. 399(4).

[9] Southern Painters v. Fertilizers and Chemicals Travancore Ltd, 1994) Supp. 2 SCC 699.

[10] Union Of India And Others v. Ex-Constable Amrik Singh, 1991 AIR 564.

[11] Sundarjas Kanyalal Bhatija and Ors. v. Collector, Thane, Maharashtra and Ors., 1990 AIR 261.

[12] Koshy George v. The University of Kerala and Ors, 1969 AIR 198.

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