M.P. Special Police Establishment v. State of M.P 2004 (8) SCC 788

CASE NO.: Appeal (civil) 7256-57 of 2004

PETITIONER: Madhya Pradesh Special Police Establishment

RESPONDENT: State of Madhya Pradesh & Ors.

DATE OF JUDGMENT: 05/11/2004

BENCH: N.SANTOSH HEGDE & S.N.VARIAVA & BISHESHWAR P.SINGH & HOTOI KHETOHO SEMA & S.B.SINHA

JUDGMENT:
[Arising out of SLP (C) Nos. 7697-7698 of 2003]

DELIVERED BY: S.N.VARIAVA, (J)

S. N. VARIAVA, J.

Leave granted.
These Appeals are against the Judgment of the Madhya Pradesh High 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
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) 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 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.

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.

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 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
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 vs.
Ramdas Shrinivas Nayak reported in 1982 (2) SCC 463 was placed
before the Division Bench. The Division Bench, however, 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 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:
"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 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 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."

Mr. Sorabjee submits that even though normally the Governor
acts on 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 for contingencies/cases where the
Governor is to act in his discretion. Articles 239(2), 371A(1)(b),
371A(2)(b), 371A(2)(f) 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 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 Governor can act in
his discretion. Such a question cannot arise in respect of 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.

Mr. Sorabjee relies on the case of Samsher Singh vs. 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:

"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 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(1)(b), 371A(1)(d) and
371A(2)(b) and 371A(2)(f). 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 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 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. In making a report under Article 356 the
Governor will be justified in exercising his discretion even
against the aid and advice 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 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 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 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:
"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-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
where an appeal to the country is necessitous, although in
this area the head of State should avoid getting involved in
politics and must be advised 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 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:
"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 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, 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 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.

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 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 161 and 185 of the
Indian Penal Code and Section 5 of the Prevention of Corruption Act.
The Metropolitan Magistrate refused to entertain the complaint 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 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 in 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."

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 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 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,
under Article 136 of the Constitution of India, against that portion of
the Judgment which directed the Governor of Maharashtra to exercise
his 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 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 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 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 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 in 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 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 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 and raise before us the
contention now advanced by the learned Attorney-General.
We have not the slightest doubt that the cause of justice
would in no way be advanced by permitting 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 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 Council of Ministers. The application for grant
of special leave is, therefore, dismissed." (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 sought to be made by the Division
Bench. 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'. [See Kumaon Mandal Vikas Ninag Ltd. vs. Girja
Shankar Pant and Others reported in (2000) 1 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 considered].

Another exception to the aforementioned general rule was
noticed in Bhuri Nath and Others etc. vs. State of Jammu &
Kashmir and Others reported in (1997) 2 SCC 745, where the
Governor was to chair the Board in terms of the Jammu and Kashmir
Shri Mata Vaishno Devi Shrine Act, 1988 on the 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:
"... The exercise of powers and functions under the Act is
distinct and different from those exercised formally in his
name for which responsibility rests only with his Council of
Ministers headed by the Chief Ministers."

In the case of A. K. Kraipak vs. 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 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 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 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 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 Basu 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 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
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 bias 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 position from
further challenge. Naturally he was also interested in
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 swearing that Naqishbund in no
manner influenced their decision in making the selections.
In a group deliberation each member of the group is 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 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 likely to have known that
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."
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 vs. Union of India,
reported in 1991 (1) SCC 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 have vitiated
the selection for the admission. It was held that there was a conflict
between interest and duty and taking into consideration human
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 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.

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 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.
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 vs. 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 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 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 bonafide manner and according to law.
Mr. Tankha also relied upon the case of State of Punjab vs. 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
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 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 Mandal Vikas Nigal Ltd. vs. Girja Shankar
Pant, reported in 2001 (1) SCC 182. In this case, the question was
whether the Managing Director had 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, 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 if the facts and
circumstances indicate 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 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 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 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.
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.

A F.I.R. was lodged in relation to the commission of offence on
31st March, 1998.

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 11th August, 1995, 24th February
1997 and 5th March, 1997 which were said to have been passed on the
teeth of the statutory provisions, 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:

"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 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 I.P.C. 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 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.

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, if the 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.
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.

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. vs. State of Orissa reported in
1984 (4) SCC 103; Institute of Chartered Accountants vs. L.K.
Ratna reported in 1986 (4) SCC 537; Charan Lal Sahu vs. Union of
India reported in 1990 (1) SCC 613; Badrinath vs. Government of
Tamil Nadu reported in 2000 (8) SCC 395; Election Commission of
India vs. Dr. Subramaniam Swamy reported in 1996 (4) SCC 104;
Ramdas Shrinavas Nayak (supra) and State of M. P. vs. 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 grant of
sanction. We also presume that a high authority like the Council of
Ministers will normally act in a bonafide 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 would be right, on the facts of that case,
to act in his own discretion and grant sanction.

In this view of the matter 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 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.