Administrative Law – Jurisprudence, Interpretation & General Laws Important Questions

Administrative Law – Jurisprudence, Interpretation & General Laws Important Questions

Question 1.
Administrative law is the law relating to the administration. It determines the organization, powers, and duties of administrative authorities. Discuss.
Answer:

  1. Administrative law is that branch of law that deals with powers, functions & responsibilities of various organs of the State. There is no single universal definition of ‘administrative law’ because it means different things to different theorists.
  2. Administrative Law is the law concerning the powers and procedures of administrative agencies, including especially the law governing the judicial review of administrative action.
  3. Administrative law is the branch of the law governing the relationship between the individual and the executive branch of the government when the latter acts in its administrative capacity.
  4. Administrative law determines the organization, powers, and duties of administrative authorities.
  5. Administrative law deals with the powers of administrative authorities the manner in which the powers are exercised and the remedies which are available to the aggrieved persons when those powers are abused by these authorities.

The primary function of administrative law is to keep governmental powers within the limits of law and to protect privacy rights and individual interests.

Rule-making power (delegated legislation) and an authority to decide (Tribunal/ Court) are described as effective and powerful weapons in the armory of administration.

All power has two inherent characteristics:

  • They are not absolute or unfettered.
  • They are likely to be abused.

Administrative law attempts to control the power of the government, and its instrumentalities and agencies. To achieve that objective, administrative law provides an effective mechanism and adequate protection. It helps to strike between two conflicting force:

  • Individual rights
  • Public interest.

Question 2.
Distinguish between: Constitutional Law & Administrative Law.
Answer:
Following are the main points of distinction between constitutional law & administrative law:

Points Constitutional Law Administrative Law
Meaning Constitutional law is the body of law that evolves from a constitution, setting out the fundamental right and duties for its citizens and also the principles according to which a State is governed and defining the relationship between the various branches of government within the State. Administrative Law is the law concerning the powers and procedures of administrative agencies, including especially the law governing the judicial review of administrative action.
Class Constitutional law is a genus. It is the mother of all law of India. Administrative law is a species of Constitutional Law.
Deals with Constitutional law deals with various organs of the State. It also deals with the structure of the State. Administrative law deals with those organs as in motion/ function. Thus, it deals with functions of the State.
Superiority Constitutional law is the supreme and highest law in the country. Administrative law is subordinate to Constitutional Law.
Type Constitutional law is a theoretical one. Administrative law is practical and functional.

Question 3.
Write a short note on Administrative Discretion
Answer:
Discretion in layman’s language means choosing from amongst the various available alternatives without reference to any predetermined criterion, no matter how fanciful that choice may be.

The term “discretion” when qualified by the word “administrative” has somewhat different overtones. ‘Discretion’ in this sense means choosing from amongst the various available alternatives, but with reference to the rules of reason and justice and not according to personal whims. Such exercise is not to be arbitrary, vague, and fanciful but legal and regular.

Conferment of discretion: Discretion is conferred in the area of rule-making or delegated legislation e.g. when the statutory formula says that the government may make rules which it thinks expedient to carry out the purposes of the Act. In effect, broad discretion and choice are being conferred on the government to make rules. Similarly, discretion is conferred on adjudicatory and administrative authorities on a liberal basis, that is, the power is given to apply vague statutory standards from case to case.

Need of discretion: Because of the complexity of socio-economic conditions which the administration in modern times has to contend with, it is realized that a government having only ministerial duties with no discretionary functions will be extremely rigid and unworkable and that, to some extent, officials must be allowed a choice as to when, how, and whether they will act.

The reason for this attitude is that, more often than not, the administration is required to handle intricate problems which involve investigation of facts, making of choices, and exercise of discretion before deciding upon what action to take. Thus, the modern tendency is to leave a large amount of discretion with various authorities.

Question 4.
Judicial review is the authority of Courts to declare void the acts of the legislature and executive if they are found in violation of provisions of the Constitution. Comment. [Dec 2019 (4 Marks)]
Answer:
The biggest check over administrative action is the power of judicial review. Judicial review is the authority of Courts to declare void the acts of the legislature and executive if they are found in violation of provisions of the Constitution. Judicial Review is the power of the highest Court of jurisdiction to invalidate on Constitutional grounds, the acts of other Government agencies within that jurisdiction.

The doctrine of judicial review has been originated and developed by the American Supreme Court, although there is no express provision in the American Constitution for the judicial review. The judicial review is not an appeal from a decision but a review of the manner in which the decision has been made. The judicial review is concerned not with the decision but with the decision-making process.

The power of judicial review controls not only the legislative but also the executive or administrative act. The Court scrutinizes the executive act for determining the issue as to whether it is within the scope of authority or power conferred on the authority exercising the power. Where the act of executive or administration is found ultra vires the Constitution or the relevant Act, it is declared void. The Court’s attitude appears to be stiff er in respect of discretionary powers of the executive or administrative authorities.

The Court is not against the vesting of discretionary power in the executive, but it expects that there would be proper guidelines for the exercise of power. The Court interferes when the uncontrolled and unguided discretion is vested in the executive or administrative authorities or the repository of the power abuses its discretion.

Question 5.
If the discretionary power is exercised by the authority with bad faith or dishonest intention, the action is quashed by the Court. Discuss.
Answer:
If the discretionary power is exercised by the authority with bad faith or dishonest intention, the action is quashed by the Court.

Mala fide (bad faith) may be taken to mean dishonest intention or corrupt motive. In relation to the exercise of statutory powers, it may be said to comprise dishonesty, fraud, and malice. Power is exercised fraudulently if its repository intends to achieve an object other than that for which he believes the power to have been conferred. The intention may be to promote another public interest or private interest.

In Partap Singh v. the State of Punjab, the Supreme Court, by a majority judgment, set aside an order of suspension and departmental proceedings against a Civil Surgeon on the ground that the order of the Government was made at the instance of Chief Minister who had grudge against the appellant.

Question 6.
Under what circumstances the decision exercised by administrative authorities are treated as an abuse of discretion? Explain any four. [Dec 2019 (4 Marks)]
Answer:
Abuse of discretion:

  1. Mala Fides (bad faith): If the discretionary power is exercised by the authority with bad faith or dishonest intention, the action is quashed by the Court.
  2. Leaving out relevant considerations: The administrative authority exercising the discretionary power is required to take into account all the relevant facts. If it leaves out relevant consideration, its action will be invalid.
  3. Arbitrary orders: The order made should be based on facts and cogent reasoning and not on the whims and fancies of the adjudicatory authority.
  4. Improper purpose: The discretionary power is required to be used for the purpose for which it has been given. If it is given for one purpose and used for another purpose it will amount to an abuse of power.
  5. Colorable exercise of power: Colourable exercise means that under the “color” or “guise” of the power conferred for one purpose, the authority is seeking to achieve something else which it is not authorized to do under the law in question.
  6. Exceeding jurisdiction: An administrative authority is required to exercise discretion within the limits of the statute. An action or decision going beyond what is authorized by law is ultra vires.

Question 7.
Write a short note on Non-application of mind
Answer:
Where the authority exercises its discretionary power under the instructions or dictation from superior authority it is taken as a non-exercise of power by the authority and its decision or action is bad. In such a condition, the authority purports to act on its own but in substance, the power is not exercised by it but by the other authority. The authority entrusted with the powers does not take action on its own judgment and does not apply its mind.

In Commissioner of Police v. Gordhandas Bhanji, the Police Commissioner empowered to grant a license for the construction of cinema theatres, granted the license but later canceled it at the discretion of the Government. The cancellation order was declared bad as the Police Commissioner did not apply his mind and acted under the dictation of the Government.

Question 8.
Write a short note on Preventive relief
Answer:
Preventive relief means preventing a person from doing such things or acts, which he is under an obligation not to do. It is directed to prevent the violation of the negative actions and therefore it is called preventive relief. The power upon Courts to prevent and to restrain is absolutely necessary for the effective administration of justice. Preventive relief is granted at the discretion of the Court by injunctions – temporary or perpetual.

Question 9.
Distinguish between: Temporary Injunction & Perpetual Injunction
Answer:
Following are the main points of distinction between temporary and perpetual injunction:

Points Temporary Injunction Perpetual Injunction
Meaning A temporary injunction is a Court Order prohibiting an action until there has been a trial or other court action. A perpetual injunction is a type of order issued by a Court after a full trial on the merits of a case has been conducted.
Nature A temporary injunction is provisional in nature as it does not conclude or determine a right. Perpetual injunction is permanent in nature as it determines a right on the merits of the suit.
Governing statute Temporary injunctions also known as interlocutory and are granted under the Civil Procedure Code 1908. Perpetual injunctions are granted under Section 38 of the Specific Relief Act, 1963.
Stage of granting It is granted before the plaintiff establishing his case at the trial and continues up to a specified time. Perpetual injunction can be granted only after hearing the defendant and upon the merits of the suit.

Question 10.
The Civil Court has the power to grant a temporary injunction, but for obtaining the same the plaintiff is required to satisfy the Court. Explain in brief. [June 2019 (4 Marks)]
Answer:
Temporary injunctions are such as to continue until a specified time or until the further order of the court. It is granted as an interim measure to preserve the status quo until the case is heard and decided. A temporary injunction may be granted at any stage of a suit. Temporary injunctions are regulated by the Civil Procedure Code and are provisional in nature. It does not conclude or determine a right. Besides, a temporary injunction is a mere order. The granting of a temporary injunction is a matter of discretion of the Court.

The court may grant a temporary injunction to restrain any such act (as set out below) or make such other order for the purpose of staying and preventing the wasting, damaging, alienation or sale or removal or disposition of the property g or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit; where it is proved by affidavit or otherwise:

  1. That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree.
  2. That the defendant threatens or intends to remove or dispose of his property with a view to defrauding his creditors.
  3. That the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit.
  4. It would be necessary for the plaintiff to satisfy the Court that substantial and irreparable harm or injury would be suffered by him if such temporary injunction (till the disposal of the suit) is not granted and that such loss or damage or harm cannot be compensated by damages.

Question 11.
No person should be made a judge in his own cause. Comment.
Answer:
It is a fundamental principle that no man shall be a judge of his own cause. The principle is that a judge is disqualified from determining any case in which he may, or may fairly be suspected to have an interest in the subject matter. The underlying principle is that justice should not only be done but should manifestly and undoubtedly be seen to be done.

In the case of A. K. Kraipak v. Union of India, the facts show that one of the members of a selection board constituted to make the selection to a Central cadre, was also a candidate for the interview. After the interview, the name of the candidate appeared at the top of the list. This was challenged as infringing the principles of natural justice. It was held that as the member was one of the persons to be considered for selection it was against all canons of justice to make him judge of his own cause.

Though he did not participate in the deliberation of the committee when his name was considered, his presence in the selection board must have had its own impact on the decision of the board. It was also held that it was his interest to keep out his rivals in order to keep his position safe. It follows that the Supreme Court has declared that there need not be any actual deliberation to make it invalid.

The first requirement is that the Judge should be impartial and natural and must be free from bias. One cannot act as judge of a cause in which he himself has some interest either pecuniary or otherwise as it affords the strongest proof against neutrality.

One must be in a position to act judicially and to decide the matter objectively. If the judge is subject to bias in favor of or against either party to the dispute or is in a position that a bias can be assumed, he is disqualified to act as a judge and the proceedings will be vitiated. It is a well-settled principle of law that justice should not only be done but manifestly and undoubtedly be seen to be done.

Question 12.
Write a short note on Rule against bias
Answer:
According to this rule, no person should be made a judge in his own cause. Bias means an operative prejudice whether conscious or unconscious in relation to a party or issue. It is a presumption that a person cannot take an objective decision in a case in which he has an interest. The rule against bias has two main aspects – one, that the judge must not have any direct personal stake in the matter at hand, and two, there must not be any real likelihood of bias.

Bias can be of the following three types:
(a) Pecuniary bias: Pecuniary bias, however slight, will vitiate the decision. This is a case where the deciding authority has monetary7 or proprietary interest in the subject matter. The historical example is the decision of the House of Lords in Dimes v. Grand Junction Canal There the judgment of Lord Cottenham in a case was set aside since he held shares in the respondent company.

It was observed, “It is of importance that the maxim that no man is to be a judge in his own cause should be held sacred”. It was rightly stated that a pecuniary interest however slight, will disqualify even though it is not proved that the decision is in any way affected.

(b) Personal bias: Personal bias may arise owing to friendship, personal ani¬mosity, or near relationship. But it is difficult to say when it will vitiate the order. What is required is taking a decision Personal animosity will vitiate the order. In P. H. Kalyani v. Air France, Culcutta, it was held that where an inquiry was conducted by an officer against whom the delinquent employee had earlier given evidence. In a criminal proceeding was held incompetent to hold a disciplinary inquiry.

(c) Subject matter bias: A judge may have a bias in the subject matter, which means that he himself is a party, or has some direct connection with the litigation. To disqualify on the ground of bias there must be an intimate and direct connection between the adjudicator and the issues in dispute. To vitiate the decision on the ground of bias as for the subject matter there must be a real likelihood of bias.

Question 13.
Notice is the first limb of a proper hearing. Explain.
Answer:
Notice is the first limb of a proper hearing. Notice should be definite. It should specify the authority issuing the notice. The notice must give sufficient time to the person concerned to prepare his case. Whether the person concerned has been allowed sufficient time or not depends upon the facts of each case. The notice must be adequate and reasonable. The notice is required to be clear and unambiguous. If it is ambiguous or vague, it will not be treated as reasonable or proper notice.

The Courts insist that sufficient time should be given to the person against whom action is proposed to be taken to prepare his defense. The Court has struck down a notice which stated that an inquiry would be held in the next morning. Notice need not be reissued if the concerned party acquires knowledge of the proceeding and appears before the authority. But if the statute specifically provides for a notice the proceeding may be struck down for failure to issue the notice

In R v. the University of Cambridge, Dr. Bentley was deprived of his degrees by the Cambridge University on account of his alleged misconduct without giving any notice or opportunity of hearing. The Court of King’s Bench declared the decision as null and void.

Question 14.
Abhay a student of Dayaram Medical College was debarred from entering into premises of the college and attending the class till the pendency of a criminal case against him for stabbing Ranvir, another student of the college. In preliminary inquiry before the college authority, he submitted that he has not stabbed Ranvir and debarring him from attending the college will cause a lot of loss in his studies and such order is against the principle of natural justice as he has not been given the opportunity of being heard in the preliminary inquiry. Decide.
Answer:
The rules of natural justice are not attractive in the case of interim disciplinary action. In Abhay Kumar v. K. Srinivasan AIR 1981 Delhi 381, an order was passed by the college authority debarring the student from entering the premises of the college and attending the class till the pendency of a criminal case against him for stabbing a student. The Court held that the order was interim and not final. It was preventive in nature. It was passed with the object to maintain peace on the campus. The rules of natural justice were not applicable in such cases.

Thus, keeping in view of the above decision it can be concluded that there is no violation of the principle of natural justice. A further only preliminary inquiry is started and on completion of final proceedings of complaint, if college authorities & police do not found Abhay guilty of charges, he will be allowed to attend the college. Hence, Abhay is advised to cooperate in the inquiry so that proceedings are completed as early as possible to avoid further loss of his studies.

Question 15.
Explain in brief the ‘Audi Alterum Partem Rule’ under the Administrative law. [Dec 2018 (4 Marks)]
Answer:
The second principle of natural justice is Audi Alteram Partem. Hear the other side is the essence of the principle.

The authority:

  • Must not hear one side in absence of other, or
  • Must not make a decision without hearing the other side.

Being part of natural justice, it was made applicable even to administrative authority adjudicating matters having civil consequences. In practice, it is more frequently invoked than the rule against bias. No proposition can be more clearly established than that a man cannot incur the loss of liberty or property for an offense by a judicial proceeding until he has had a fair opportunity of answering the case against him.

Question 16.
Explain in the brief doctrine of ‘Nemo Judex in Causa Sua [June 2019 (4 Marks)] x
Answer:
According to this rule, no person should be made a judge in his own cause. Bias means an operative prejudice whether conscious or unconscious in relation to a party or issue. It is a presumption that a person cannot take an objective decision in a case in which he has an interest. The rule against bias has two main aspects – one, that the judge must not have any direct personal stake in the matter at hand, and two, there must not be any real likelihood of bias.

Bias can be of the following three types:
(a) Pecuniary bias: Pecuniary bias, however slight, will vitiate the decision. This is a case where the deciding authority has monetary7 or proprietary interest in the subject matter. The historical example is the decision of the House of Lords in Dimes v. Grand Junction Canal There the judgment of Lord Cottenham in a case was set aside since he held shares in the respondent company.

It was observed, “It is of importance that the maxim that no man is to be a judge in his own cause should be held sacred”. It was rightly stated that a pecuniary interest however slight, will disqualify even though it is not proved that the decision is in any way affected.

(b) Personal bias: Personal bias may arise owing to friendship, personal ani¬mosity, or near relationship. But it is difficult to say when it will vitiate the order. What is required is taking a decision Personal animosity will vitiate the order. In P. H. Kalyani v. Air France, Culcutta, it was held that where an inquiry was conducted by an officer against whom the delinquent employee had earlier given evidence. In a criminal proceeding was held incompetent to hold a disciplinary inquiry.

(c) Subject matter bias: A judge may have a bias in the subject matter, which means that he himself is a party, or has some direct connection with the litigation. To disqualify on the ground of bias there must be an intimate and direct connection between the adjudicator and the issues in dispute. To vitiate the decision on the ground of bias as for the subject matter there must be a real likelihood of bias.

Question 17.
Enumerate in short the exceptional circumstances of the application of natural justice under Administrative Law. [Dec 2019 (4 Marks)]
Answer:
The principles of natural justice have taken deep root in the judicial conscience of our people. Where authority functions under a statute and the statute provides for the observance of the principles of natural justice in a particular manner, natural justice will have to be observed in that manner and in no other. No wider right than that provided by statute can be claimed nor can the right be narrowed.

Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The implication of natural justice being presumptive it may be excluded by express words of the statute or by necessary intendment. So the principles of natural justice can be modified and also in exceptional cases they can even be excluded. Some of the exceptions are given below:

(1) Statutory Exclusion: The principle of natural justice may be excluded by the statutory provision. Where the statute expressly provides for the observance of the principles of natural justice, the provision is treated as mandatory and the authority ¡s bound by it.

Where the statute is silent as to the observance of the principle of natural justice, such silence is taken topic the observance thereto. However, the principles of natural justice are not incapable of exclusion. The statute may exclude them. When the statute expressly or by necessary implication excludes the application of the principles of natural justice the courts do not ignore the statutory mandate.

Emergency: In exceptional cases of urgency or emergency where prompt and preventive action has required the principles of natural justice need not be observed.

Emergency or prompt action in case of public interest, public safety, or public health was held to be a reasonable, valid, and justifiable ground for exclusion of Principles of Natural Justice. Thus, the pre-decisional hearing may be excluded where prompt action is required to be taken in the interest of public safety or public morality.

Interim disciplinary action: The rules of natural justice are not attractive in the case of interim disciplinary action.

Academic evaluation: Where a student is removed from an educational institution on the grounds of unsatisfactory academic performance, the requirement of pre-decisional hearing is excluded. The Supreme Court has made it clear that if the competent academic authority assesses the work of a student over the period of time and thereafter declares his work unsatisfactory the rule of natural justice may be excluded but this exclusion does not apply in the case of disciplinary matters.

Impracticability: Where the authority deals with a large number of person it is not practicable to give all of the opportunity of being heard and therefore in such condition the court does not insist on the observance of the rules of natural justice.

Question 18.
Discuss the provisions relating to the formation of a Government Contract under the Constitution of India.
Answer:
Formation of Government Contracts: The executive power of the Union of India and the States to carry on any trade or business, acquire, hold and dispose of property and make contracts is affirmed by Article 298 of the Constitution of India. If the formal requirements required by Article 299 are complied with, the contract can be enforced against the Union or the States.

Article 299 provides:
1. All contracts made in the exercise of executive power of the union or a state shall be expressed to be made by the President or by the Governor of the State as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such person and in such manner as he may direct or authorize.

2. Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purpose of any enactment relating to Government of India hereto before in force, nor shall any such contract or assurance on behalf of any of them be personally liable in respect thereof.

Thus, Article 299 lays down three conditions which the contracts made in the exercise of the executive power of the Center or a State must fulfill to be valid:

  • The contract must be expressed to be made by the President or the Governor as the case may be.
  • These contracts made in the exercise of the executive power are to be executed on behalf of the President/Governor as the case may be.
  • The execution must be by such person and in such manner as the President or the Governor of the case as the case may be, may direct, or authorize.

It has been held by the Supreme Court in the case of Bhikaraj Jaipuria v. Union of India, it is clear from the words “expressed to be made” and “executed” that there must be a formal written contract. The provisions of Article 299(1) are mandatory in character and any contravention thereof nullifies the contract and makes it void.

Where a contract is made by tender and acceptance, the acceptance must be made by a duly authorized person and on behalf of the President, and a valid contract may result from correspondence. J,

Implied Contract with the Government: In view of Article 299(1) there can be x no implied contract between the government and another person, the reason g being that if such implied contracts between the government and another § person were allowed, they would in effect make Article 299(1) useless, for then P a person who had a contract with the government which was not executed I at all in the manner provided under Article 299(1) could get away by saying that an implied contract may be inferred on the facts and the circumstances j of the particular case.

Question 19.
Write a short note on Quasi-contractual liability of the Government
Answer:
The obligation of a person enjoying the benefit of the non-gratuitous act [SectIon 70 of the Indian Contract Act, 1872]: Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

Illustrations: (As given in Indian contract Act, 1872)
(a) A, a tradesman, leaves goods at B’s house by mistake. B treats the goods as his own. He is bound to pay A for them.
(b A saves B’s property from fire. A is not entitled to compensation from B if the circumstances show that he intended to act gratuitously. If the requirements of Section 70 arc fulfIlled, even the Government will be liable to pay compensation for the work actually done or services rendered by the State.

Section 70 is not based on any subsisting contract between the parties but is based on quasi-contract or restitution. Section 70 enables a person who actually supplies goods or renders some services not intending to do gratuitously, to claim compensation from the person who enjoys the benefit of the supply made or services rendered. It is a liability, which arises on equitable grounds even though express agreement or contract may not be proved.

Question 20.
Write a short note on Vicarious liability of Government
Answer:
Unlike the Crown Proceeding Act, 1947 of England, we have no statutory provision with respect to the liability of the State in India. When a case of Government liability in tort comes before the Courts, the question is whether the particular Government activity, which gave rise to the tort, was the sovereign function or non-sovereign function.

If it is a sovereign function it could claim immunity from the tortuous liability, otherwise not. Generally, the activities of commercial nature or those which can be carried out by the private individual are termed as non-sovereign functions.

In India, Article 300 of the Constitution declares that the Government of India or of a State may be sued for the tortious acts of its servants in the same manner as the Dominion of India and the corresponding provinces could have sued or have been sued before the commencement of the Constitution. This rule is, however, subject to any such law made by the Parliament or the State Legislature. No law has so far been passed as contemplated by Article 300(1).

Question 21.
The driver of a jeep, owned and maintained by the State of Rajasthan for the official use of the Collector of the district, drove it rashly and negligently while taking it back from the workshop to the residence of the Collector after repairs, knocked down a pedestrian and fatally injured him. Whether State is vicariously liable for damages caused by the negligence of the driver?
Answer:
In-State of Rajasthan y. Vidyawati, the driver of a jeep, owned and maintained by the State of Rajasthan for the official use of the Collector of the district, drove it rashly and negligently while taking it back from the workshop to the residence of the Collector after repairs, knocked down a pedestrian and fatally injured him. The State was sued for damages. The Supreme Court held that the State was vicariously liable for damages caused by the negligence of the driver.

The decision of the Supreme Court in the above case introduces an important qualification on the State immunity in tort based on the doctrines of sovereign and non-sovereign functions. It decided that the immunity for State action can only be claimed if the act in question was done in the course of the exercise of sovereign functions. Thus, immunity is not available for non-sovereign functions and the State will liable for the damages.

Question 22.
A lady doctor of a government hospital was negligent while conducting an operation on Dinkar’s leg. The lady doctor amputated the left leg of Dinkar instead of his right leg by mistake. Dinkar filed suit against the authority of the government hospital and lady doctor for damages on the plea of negligence. Will lie succeed?
Answer:
Yes. Dinkar will succeed. Where the relations of master and servant exist, a master is liable not only for those authorized acts which have been committed by the servants but also for the acts done by him which not specifically authorized in the course of his employment.

The defense of the government that running a hospital is a sovereign function and hence it is not liable will not hold good, as declared in various cases. The extent of liability of the lady doctor would be determined by the rules/conditions of her employment.

Question 23.
What do you understand by the term ‘Statutory Corporations’? Give examples. Also, state their main features.
Answer:
A public corporation is that form of public enterprise which is created as an autonomous unit, by a Special Act of the Parliament or the State Legislature.

Since a public corporation is created by a Statute; it is also known as a statutory corporation.

Following are some o1 the examples of Public Corporations:

  • Life Insurance Corporation (LIC)
  • Food Corporation of India (FCI)
  • Oil and Natural Gas Corporation (ONGC)
  • Air India
  • State Bank of India (SB!)
  • Reserve Bank of India (RBI)
  • Employees State Insurance Corporation (ESIC)

Features: Features of statutory corporations are as follows:

Special statute: A public corporation is created by a special Act of the Parliament or the State Legislature. The Act defines its powers, objectives, functions, and relations with the ministry and the parliament or State Legislature.

Separate legal entity: A public corporation is a separate legal entity with perpetual succession and a common seal. It has an existence, independent of the Government. It can own property; can make contracts and hic suits, in its own name.

Capital provided by the Government: The capital of a public corporation is provided by the Government or by agencies controlled by the government.

However, many public corporations have also begun to raise money from the capital market.

Financial autonomy: A public corporation enjoys financial autonomy. It prepares its own budget and has the authority to retain and utilize its earnings for its business.

Management by Board of Directors: Its management is vested in a Board of Directors, appointed or nominated by the Government. But there is no Governmental interference in the day-to-day working of the corporation.

Own Staff: A publication corporation has its own staff; whose appointment, remuneration, and service conditions are decided by the corporation itself.

Service Motive: The main objective of a public corporation is service-motive; though it is expected to the self-supporting and earn reasonable profits.

Public Accountability: A public corporation has to submit its annual report on its work. Its accounts are audited by the Comptroller and Auditor General of India. Annual reports and audited accounts of a public corporation are presented to the Parliament or State Legislatures, which is entitled to discuss these.

Question 24.
Can ‘Government Company’ is treated as ‘State or Central Government’ for claiming exemption under the various statutes or constitutions of India?
Answer:
In Andhra Pradesh Road Transport corporation y, ITO, the Andhra Pradesh State Road Transport Corporation claimed exemption from taxation by invoking Articles 289 of the Constitution of India according to which the property and income of the State are exempted from the Union taxation.

The Supreme Court, while rejecting the Corporation’s claim, held that though it was wholly controlled by the State Government, it had a separate entity and its income was not the income of the State Government. The Court observed that the companies which are incorporated under the Companies Act have a corporate personality of their own, distinct from that of the Government of India. The land and buildings are vested in and owned by the companies, the Government of India only owns the share capital.

In Hindus/a Steel Works construction Ltd. y. In the state of Kerala, it was held that in spite of all the control of the Government, the company is neither a Government department nor a Government establishment, it is just an agency of the Government, and hence not exempt from the purview of Kerala Construction Workers Welfare Funds Act. The employees of a Government Company are not the employees of the Central or State Government.

Jurisprudence, Interpretation & General Laws Questions and Answers

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