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Judgment
Chittaranjan Dash, J.
This matter is taken up through hybrid arrangement.
The present writ petition assails the order dated 30.07.2026 passed by the Joint Labour Commissioner, Cuttack Range, communicated vide Letter No.2244/JLC, whereby the Petitioner’s request seeking cancellation of the registration granted to Opposite Party No.5-Union came to be rejected. The registration in favour of Opposite Party No.5 had earlier been granted on 12.05.2026.
The issue raised by the Petitioner essentially concerns the correctness of the membership particulars furnished by Opposite Party No.5 at the time of seeking registration. The Petitioner asserts that certain persons shown as members of Opposite Party No.5 were, in fact, members of the Petitioner-Union and had themselves sworn affidavits denying their membership of Opposite Party No.5. The Petitioner claims that as many as 18 such affidavits were placed before the registering authorities. These objections, according to the Petitioner, have a direct bearing upon the question whether the statutory requirements relating to membership and registration stood satisfied. The appeal dated 21.07.2026 specifically raised these issues.
We have carefully perused the order dated 30.07.2026. The order, in substance, proceeds on the basis that the authority had relied upon the verification conducted by the District Labour Officer and had acted in accordance with the provisions of the Trade Unions Act. It further records that due diligence had been exercised and that all possible measures had been adopted to avoid prejudice to either party. On that basis, the Petitioner’s request for cancellation of the registration has been rejected.
In our considered view, the aforesaid reasoning does not meet the requirement of a proper adjudication of the controversy raised before the authority. The issue was not merely whether some verification had been undertaken by the District Labour Officer. The authority was required to examine the specific objections raised by the Petitioner and, more particularly, the material placed in support thereof, including the affidavits of the workers who allegedly disputed their inclusion in the membership of Opposite Party No.5. The order does not disclose whether the said affidavits were considered, whether their contents were verified, what the verification revealed, or for what reasons the objections founded upon such material were not accepted.
A mere reference to an earlier verification cannot, by itself, constitute consideration of the objections raised in the subsequent proceeding. Where a statutory authority is called upon to determine a dispute involving disputed facts having a bearing upon the exercise of statutory power, it must indicate, at least in substance, the material which it has considered and the reasons which have persuaded it to accept or reject the rival contentions.
The aforesaid provision assumes particular importance in the present case because Section 10 of the Trade Unions Act, 1926 empowers the Registrar to withdraw or cancel a certificate of registration, inter alia, where the certificate is found to have been obtained by fraud or mistake. The provision also requires previous notice to the registered Trade Union before cancellation otherwise than on its own application. Thus, before taking any decision on the Petitioner’s request, the authority was required to consider the material placed before it and arrive at a proper conclusion in accordance with law.
It is a settled principle of law that an administrative or quasi-judicial authority, while exercising statutory power having civil consequences, is required to disclose reasons demonstrating due application of mind to the material contentions and relevant material placed before it. Though the principle is well settled, the Supreme Court has reiterated its importance in recent decisions. In Basudev Dutta v. State of West Bengal & Ors., 2024 INSC 940, the Hon’ble Supreme Court, observed the following:
“12.2.It is settled law that every administrative or quasi-judicial order must contain the reasons. Such reasons go a long way in not only ensuring that the authority has applied his mind to the facts and the law, but also provide the grounds for the aggrieved party to assail the order in the manner known to law. In the absence of any reasons, it also possesses a difficulty for the judicial authorities to test the correctness of the order or in other words, exercise its power of judicial review. In this context, it will be useful to refer to the judgment of this Court in Kranti Associates (P) Ltd. v. Masood Ahmed Khan1, wherein after a detailed analysis of various judgments, it was held as follows:
“27.In Rama Varma Bharathan Thampuram v. State of Kerala [(1979) 4 SCC 782: AIR 1979 SC 1918] V.R. Krishna Iyer, J. speaking for a three-Judge Bench held that the functioning of the Board was quasi-judicial in character. One of the attributes of quasi-judicial functioning is the recording of reasons in support of decisions taken and the other requirement is following the principles of natural justice. The learned Judge held that natural justice requires reasons to be written for the conclusions made (see SCC p. 788, para 14 : AIR p. 1922, para 14).
28.In Gurdial Singh Fijji v. State of Punjab [(1979) 2 SCC 368 : 1979 SCC (L&S) 197] this Court, dealing with a service matter, relying on the ratio in Capoor [(1973) 2 SCC 836 : 1974 SCC (L&S) 5 : AIR 1974 SC 87], held that “rubber-stamp reason” is not enough and virtually quoted the observation in Capoor (supra), SCC p. 854, para 28, to the extent that:
“28.… Reasons are the links between the materials on which certain conclusions are based and the actual conclusions.” (See AIR p. 377, para 18.)
29.In a Constitution Bench decision of this Court in H.H. Shri Swamiji of Shri Amar Mutt v. Commr., Hindu Religious and Charitable Endowments Deptt. [(1979) 4 SCC 642 : 1980 SCC (Tax) 16 : AIR 1980 SC 1] while giving the majority judgment Y.V. Chandrachud, C.J. referred to (SCC p. 658, para 29) Broom”s Legal Maxims (1939 Edn., p. 97) where the principle in Latin runs as follows: 15 “Cessante ratione legis cessat ipsa lex.”
30.The English version of the said principle given by the Chief Justice is that : (H.H. Shri Swamiji case [(1979) 4 SCC 642 : 1980 SCC (Tax) 16 : AIR 1980 SC 1] , SCC p. 658, para 29)
“29.… “reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself”.” (See AIR p. 11, para 29.) …… …
33.In Star Enterprises v. City and Industrial Development Corpn. of Maharashtra Ltd. [(1990) 3 SCC 280] a three-Judge Bench of this Court held that in the present day set-up judicial review of administrative action has become expansive and is becoming wider day by day and the State has to justify its action in various fields of public law. All these necessitate recording of reason for executive actions including the rejection of the highest offer. This Court held that disclosure of reasons in matters of such rejection provides an opportunity for an objective review both by superior administrative heads and for judicial process and opined that such reasons should be communicated unless there are specific justifications for not doing so (see SCC pp. 284-85, para 10). ………
46.The position in the United States has been indicated by this Court in S.N. Mukherjee [(1990) 4 SCC 594 : 1990 SCC (Cri) 669 : 1991 SCC (L&S) 242 : (1991) 16 ATC 445 : AIR 1990 SC 1984] in SCC p. 602, para 11 : AIR para 11 at p. 1988 of the judgment. This Court held that in the United States the courts have always insisted on the recording of reasons by administrative authorities in exercise of their powers. It was further held that such recording of reasons is required as “the courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review”. In S.N. Mukherjee [(1990) 4 SCC 594 : 1990 SCC (Cri) 669 : 1991 SCC (L&S) 242 : (1991) 16 ATC 445 : AIR 1990 SC 1984] this Court relied on the decisions of the US Court in Securities and Exchange Commission v. Chenery Corpn. [87 L Ed 626 : 318 US 80 (1942)] and Dunlop v. Bachowski [44 L Ed 2d 377 : 421 US 560 (1974)] in support of its opinion discussed above.
47.Summarising the above discussion, this Court holds:
(a)In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.
(b)A quasi-judicial authority must record reasons in support of its conclusions.
(c)Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
(d)Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
(e)Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.
(f)Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasijudicial and even by administrative bodies.
(g)Reasons facilitate the process of judicial review by superior courts.
(h)The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.
(i)Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants’ faith in the justice delivery system.
(j)Insistence on reason is a requirement for both judicial accountability and transparency.
(k)If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
(l)Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or “rubber-stamp reasons” is not to be equated with a valid decision making process.
(m)It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor [(1987) 100 Harvard Law Review 731-37]).
(n)Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)], wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions”.
(o)In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “due process”.”
The aforesaid decision reiterates that reasons demonstrate application of mind to the facts and law and facilitate judicial review of the decision. Thus, a mere conclusion, without indicating consideration of the material issues arising for determination, cannot be regarded as a proper exercise of statutory power. Equally, the authority cannot seek to supplement an otherwise deficient order by supplying reasons subsequently. The validity of a statutory order has to be tested on the reasons contained in the order itself, as explained by the Constitution Bench in Mohinder Singh Gill v. Chief Election Commissioner, reported in (1978) 1 SCC 405.
In the present case, we are of the view that the appropriate course would not be to examine the disputed membership particulars for the first time in exercise of our writ jurisdiction. Such an exercise would effectively require this Court to undertake an adjudication of disputed factual matters which, in the first instance, fall within the domain of the competent statutory authority. At the same time, the infirmity in the impugned order cannot be allowed to stand, as the order does not demonstrate consideration of the material objections raised before the authority.
We are also of the view that, before the matter is reconsidered, Opposite Party No.5, whose registration may be affected by the outcome of the proceeding, must be afforded an effective opportunity of hearing. The Petitioner-Union shall likewise be given an opportunity to substantiate its objections and place such material as it seeks to rely upon. If necessary, the competent authority may call for the relevant registration records, membership particulars, affidavits and verification report and undertake such further verification as may be considered necessary in accordance with law.
Accordingly, the order dated 30.07.2026 passed by the Joint Labour Commissioner, Cuttack Range, communicated vide Letter No.2244/JLC, is set aside and the matter is remitted to the competent statutory authority for fresh consideration of the Petitioner’s proceedings seeking cancellation of the registration of Opposite Party No.5. The authority shall afford the Petitioner and Opposite Party No.5 reasonable opportunity of hearing and, upon consideration of the objections, affidavits, membership particulars, verification report and other relevant materials on record, pass a fresh, reasoned and speaking order in accordance with the Trade Unions Act, 1926 and the Rules applicable thereto.
We make it clear that we have expressed no opinion on the genuineness of the disputed membership particulars or affidavits, the validity of the registration granted to Opposite Party No.5, or the merits of the Petitioner’s prayer for cancellation, all of which are left open for consideration by the competent authority. The entire exercise shall, as far as practicable, be completed within six (06) weeks from the date of communication of this order.
The writ petition is, accordingly, disposed of.
Footnotes
- 1.(2010) 9 SCC 496 : (2010) 3 SCC (Civ) 852 : 2010 SCC OnLine SC 987.