SPEAKING ORDERS – DO THEY SPEAK LOUD ENOUGH?

by

K. VIJAY KUMAR^*

MA, BL, B.Ed, MBA

Superintendent of Central Excise, Hyderabad.

 

 

I conducted a survey in a social gathering as to what speaking orders were. These are some of the replies I received

 

1. They are other than adjudication orders
   
2. They are given when there is no offence case
   
3. They are orders relating to refunds.
   
4. They are orders when no SCN is issued
   
5. They are issued when demanded by the party
   

 

AND THEY ARE ORDERS THAT SPEAK FOR THEMSELVES.

 

The main principles of natural justice are

1. No man shall be a judge in his own case
   
2. Hear the other side
   
3. The party must be made known the reasons for the decision.
   

 

It is for this requirement of the party being told the reasons for the decision, that speaking orders are required to be passed by adjudicating authorities.

 

In simple terms a speaking order is an order that speaks for itself. The order should stand the test of legality, fairness and reason at all the higher appellate forums. That is the order should contain all the details of the issue, clear findings and a reasoned order. Such an order that speaks for itself is called a speaking order. Even the courts are required to give speaking orders except perhaps when the appeal is quashed as the court agrees with the lower court.

Quasi-judicial authorities are bound to give speaking orders. Now the courts have no hesitation in striking down an order, if it is not a speaking order. In the criminal courts, evidence plays a major role whereas, in fiscal civil cases, an interpretation of law often plays a dominant role. Further, the higher courts have only the opinion of the lower adjudicating authority to go by.

 

The Administrative authorities having a duty to act judicially can not decide on consideration of policy or expediency and so a speaking order will bring out the factors that weighed in favour or against a particular decision. One of the principles of natural justice is that a party ought to know the result of the enquiry and the reasons for the decision.

 

Speaking orders are necessary if judicial review is to be effective. One basis of this requirement is to exclude or minimise arbitrariness.

 

Justice Mathew said, " The judicial method can not be disinterested. To call it to be 'reasoned' means little for 'reason' is a tool not an end. The results of a process of reasoning depend entirely upon what premises are used in that process. Although reason is not the life of law, it surely is a part of law". So when I say that a particular rule is applicable, I should also say why it is applicable.

 

If reason is absent, the appellant forum is in the dark.

 

Speaking orders are orders, which tell their own story.

 

In the words of Chief Justice Koka Subba Rao, in MP Industries v UOI ( AIR 1966 SC 671) " The least that a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness. It gives satisfaction to the party against whom the order is made." Justice Rao continues, " Even in the case of appellate courts, invariably reasons are given, except when they agree with the reasoned judgement of the subordinate court". Of late there are orders in our department where adjudicating authorities called upon to adjudicate a case de novo say, " I agree with the findings of the original adjudicating authority and therefore confirm the demand". This order does not speak.

 

Speaking Orders as a concept was not give much importance in India, in the early years of our independence, when the officialdom was not often questioned. (Perhaps then their actions were not much questionable also) It was justice NH Bhagavathi, in Express Newspapers v UOI( AIR 1958 SC 578) who first expressed the need for Speaking Orders. In Siemens Engg & manufacturing Company V UOI,( 1976, SC 1785) the Supreme Court held that " where an authority in exercise of a quasi judicial function, makes an order, it must record its reasons. In the same case the court observed, " In fact it would be desirable that in cases arising under Customs and Excise laws, an independent quasi judicial tribunal .. is set up which would finally dispose of appeals and Revision applications under these laws, instead of leaving those appeals to the Government of India. An independent quasi-judicial tribunal would definitely inspire greater confidence in the public mind. And perhaps that is how the CEGAT was born.

The law Commission in its Fourteenth report( Vol.II, P.694, ch.31) suggested , " in the case of administrative decisions, provision should be made that they should be accompanied by reasons."

 

Finally to quote Justice Subba Rao again, " If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officers may turn out to be a potent weapon for abuse of power. But if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if it discloses extraneous or irrelevant considerations will be subject to judicial scrutiny and correction. A speaking order will at its best be a reasonable and at its worst be at least a plausible one. The public should not be deprived of this only safeguard".

 

In USA, The Administrative Procedure Act, Section 8 stipulates a speaking order. It reads, " All decisions (including initial, recommended and tentative decisions) shall include a statement of findings and conclusions and the reasons or basis thereof, on all material issues of fact, law or discretion presented on the record" . Well perhaps nobody could have expressed it better than the American Law. Incidentally the US law distinguishes between adjudication and order. " Order means the whole or any part of the final disposition( whether affirmative or declaratory in form) in any matter other than rule making but including licensing. Adjudication means the process for the formulation of an order.

 

Though there is no specific law in India on this, including in Central Excise and Customs, the courts have made speaking orders mandatory. In Customs and Excise, we have provisions for issue of Show Cause Notices, but the law specifically does not require the adjudicating or appellate authorities to give speaking orders. But whether it is provided in the Acts or not, an adjudication order has to be a speaking order even if it relates to a simple thing like waiver of pre- deposit. EXCISE LAW TIMES – 01.06.2001 – A112