Whether it is necessary to hear accused before registration of an offence against him?

 The conclusions are summarized below:

i. No opportunity of being heard is required before an FIR is lodged and registered;

ii. Classification of an account as fraud not only results in reporting the crime to investigating agencies, but also has other penal and civil consequences against the borrowers;

iii. Debarring the borrowers from accessing institutional finance Under Clause 8.12.1 of the Master Directions on Frauds results in serious civil consequences for the borrower;

iv. Such a debarment Under Clause 8.12.1 of the Master Directions on Frauds is akin to blacklisting the borrowers for being untrustworthy and unworthy of credit by banks. This Court has consistently held that an opportunity of hearing ought to be provided before a person is blacklisted;

v. The application of audi alteram partem cannot be impliedly excluded under the Master Directions on Frauds. In view of the time frame contemplated under the Master Directions on Frauds as well as the nature of the procedure adopted, it is reasonably practicable for the lender banks to provide an opportunity of a hearing to the borrowers before classifying their account as fraud;

vi. The principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the conclusions of the forensic audit report, and be allowed to represent by the banks/JLF before their account is classified as fraud under the Master Directions on Frauds. In addition, the decision classifying the borrower's account as fraudulent must be made by a reasoned order; and

vii. Since the Master Directions on Frauds do not expressly provide an opportunity of hearing to the borrowers before classifying their account as fraud, audi alteram partem has to be read into the provisions of the directions to save them from the vice of arbitrariness.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 7300 of 2022, 

Decided On: 27.03.2023

State Bank of India and Ors.  Vs. Rajesh Agarwal and Ors.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud, C.J.I. and Hima Kohli, J.

Citation:  MANU/SC/0308/2023.

Read full Judgment here: Click here

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Whether it is necessary to hear delinquent judicial officer prior to departmental inquiry?

In so far as the submission of the Learned Counsel for the
Petitioner that the reply of the Petitioner has not been considered and that the
Petitioner has also not been given a hearing in so far as the second
Departmental Enquiry is concerned, in our view the said submission is
misconceived. The Disciplinary Authority is under no obligation at the stage of
the show cause notice to afford any opportunity of hearing to a delinquent.
The Disciplinary Authority has only to consider whether there are grounds for
proceeding with so as to enquire into the truth of any allegations against the
judicial officer. In our view therefore, the said submission cannot be accepted
and there is no violation of the principles of natural justice merely because no
hearing was afforded prior to the Disciplinary Authority coming to a conclusion
to proceed departmentally against the Petitioner.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.643 OF 2017

Asif Badremunir Tahasildar Vs. State of Maharashtra 

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What is term “entitled to defend” and its connection with principles of natural justice?

At this juncture, it is necessary to state that in Udit
Narain (Supra) question arose whether a tribunal is a
necessary party. Recently a two-Judge Bench in Asstt. G.M
State Bank of India v. Radhey Shyam Pandey 
2015 (3) SCALE 39 referred
to Hari Vishnu Kamath v. Ahmad Ishaque and
 Ors.AIR 1955 SC 233
and adverted to the concept of a tribunal being a necessary
party and in that context ruled that:-
“In Hari Vishnu Kamath (supra), the larger
Bench was dealing with a case that arose from
Election Tribunal which had ceased to exist and
expressed the view how it is a proper party. In
Udit Narain Singh (supra), the Court was really
dwelling upon the controversy with regard to the
impleadment of parties in whose favour orders
had been passed and in that context observed
that tribunal is a necessary party. In Savitri
Devi (supra), the Court took exception to courts
and tribunals being made parties. It is apposite
to note here that propositions laid down in each
case has to be understood in proper perspective.
Civil courts, which decide matters, are courts in
the strictest sense of the term. Neither the court
nor the Presiding Officer defends the order before
the superior court it does not contest. If the High
Court, in exercise of its writ jurisdiction or
revisional jurisdiction, as the case may be, calls
for the records, the same can always be called for
by the High court without the Court or the

Presiding Officer being impleaded as a party.
Similarly, with the passage of time there have
been many a tribunal which only adjudicate and
they have nothing to do with the lis. We may cite
few examples; the tribunals constituted under
the Administrative Tribunals Act, 1985, the
Custom, Excise & Service Tax Appellate Tribunal,
the Income Tax Appellate Tribunals, the Sales
Tax Tribunal and such others. Every
adjudicating authority may be nomenclatured as
a tribunal but the said authority(ies) are different
that pure and simple adjudicating authorities
and that is why they are called the authorities.
An Income Tax Commissioner, whatever rank he
may be holding, when he adjudicates, he has to
be made a party, for he can defend his order. He
is entitled to contest. There are many authorities
under many a statute. Therefore, the proposition
that can safely be culled out is that the
authorities or the tribunals, who in law are
entitled to defend the orders passed by them, are
necessary parties and if they are not arrayed as
parties, the writ petition can be treated to be not
maintainable or the court may grant liberty to
implead them as parties in exercise of its
discretion. There are tribunals which are not at
all required to defend their own order, and in that
case such tribunals need not be arrayed as
parties.”
The principle that has been culled out in the said case
is that a tribunal or authority would only become a
necessary party which is entitled in law to defend the order.
17. The term “entitled to defend” confers an inherent right
to a person if he or she is affected or is likely to be affected
by an order to be passed by any legal forum, for there would

be violation of natural justice. The principle of audi alteram
partem has its own sanctity but the said principle of natural
justice is not always put in strait jacket formula. That
apart, a person or an authority must have a legal right or
right in law to defend or assail.
18. We may first clarify that as a proposition of law it is
not in dispute that natural justice is not an unruly horse.
Its applicability has to be adjudged regard being had to the
effect and impact of the order and the person who claims to
be affected; and that is where the concept of necessary party
become significant.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6774 of 2015
(@ SLP(C) NO. 16650 OF 2012)
Poonam
 V
State of U.P. & Ors
Citation;(2016) 2 SCC779
Dipak Misra, J.
Dated;October 29, 2015

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Whether accused is entitled to hearing prior to registration of offence against him?

29. Section 154 of the Code places an unequivocal duty upon the police officer in charge of a police station to register FIR upon receipt of the information that a cognizable offence has been committed. It hardly gives any discretion to the said police officer. The genesis of this provision in our country in this regard is that he must register the FIR and proceed with the investigation forthwith. While the position of law cannot be dispelled in view of the three Judge Bench Judgment of this Court in State of Uttar Pradesh v. Bhagwant Kishore Joshi [AIR 1964 SC 221], a limited discretion is vested in the investigating officer to conduct a preliminary inquiry pre-registration of a FIR as there is absence of any specific prohibition in the Code, express or implied. The subsequent judgments of this Court have clearly stated the proposition that such discretion hardly exists. In fact the view taken is that he is duty bound to register an FIR. Then the question that arises is whether a suspect is entitled to any pre-registration hearing or any such right is vested in the suspect.

30. The rule of audi alteram partem is subject to exceptions. Such exceptions may be provided by law or by such necessary implications where no other interpretation is possible. Thus rule of natural justice has an application, both under the civil and criminal jurisprudence. The laws like detention and others, specifically provide for post-detention hearing and it is a settled principle of law that application of this doctrine can be excluded by exercise of legislative powers which shall withstand judicial scrutiny. The purpose of the Criminal Procedure Code and the Indian Penal Code is to effectively execute administration of the criminal justice system and protect society from perpetrators of crime. It has a twin purpose; firstly to adequately punish the offender in accordance with law and secondly to ensure prevention of crime. On examination, the scheme of the Criminal Procedure Code does not provide for any right of hearing at the time of registration of the First Information Report. As already noticed, the registration forthwith of a cognizable offence is the statutory duty of a police officer in charge of the police station. The very purpose of fair and just investigation shall stand frustrated if pre- registration hearing is required to be granted to a suspect. It is not that the liberty of an individual is being taken away or is being adversely affected, except by the due process of law. Where the Officer In-charge of a police station is informed of a heinous or cognizable offence, it will completely destroy the purpose of proper and fair investigation if the suspect is required to be granted a hearing at that stage and is not subjected to custody in accordance with law. There would be the pre- dominant possibility of a suspect escaping the process of law. The entire scheme of the Code unambiguously supports the theory of exclusion of audi alteram partem pre-registration of an FIR. Upon registration of an FIR, a person is entitled to take recourse to the various provisions of bail and anticipatory bail to claim his liberty in accordance with law. It cannot be said to be a violation of the principles of natural justice for two different reasons. Firstly, the Code does not provide for any such right at that stage. Secondly, the absence of such a provision clearly demonstrates the legislative intent to the contrary and thus necessarily implies exclusion of hearing at that stage. This Court in the case of Union of India v. W.N. Chadha (1993) Suppl. (4) SCC 260 clearly spelled out this principle in paragraph 98 of the judgment that reads as under:

“98. If prior notice and an opportunity of hearing are to be given to an accused in every criminal case before taking any action against him, such a procedure would frustrate the proceedings, obstruct the taking of prompt action as law demands, defeat the ends of justice and make the provisions of law relating to the investigation lifeless, absurd and self- defeating. Further, the scheme of the relevant statutory provisions relating to the procedure of investigation does not attract such a course in the absence of any statutory obligation to the contrary.”

31. In the case of Samaj Parivartan Samuday v. State of Karnataka (2012) 7 SCC 407, a three-Judge Bench of this Court while dealing with the right of hearing to a person termed as ‘suspect’ or ‘likely offender’ in the report of the CEC observed that there was no right of hearing. Though the suspects were already interveners in the writ petition, they were heard. Stating the law in regard to the right of hearing, the Court held as under :

“50. There is no provision in CrPC where an investigating agency must provide a hearing to the affected party before registering an FIR or even before carrying on investigation prior to registration of case against the suspect. CBI, as already noticed, may even conduct pre-registration inquiry for which notice is not contemplated under the provisions of the Code, the Police Manual or even as per the precedents laid down by this Court. It is only in those cases where the Court directs initiation of investigation by a specialised agency or transfer investigation to such agency from another agency that the Court may, in its discretion, grant hearing to the suspect or affected parties. However, that also is not an absolute rule of law and is primarily a matter in the judicial discretion of the Court. This question is of no relevance to the present case as we have already heard the interveners."

Reportable
 Supreme Court of India

Anju Chaudhary vs State Of U.P.& Anr on 13 December, 2012

Bench: Swatanter Kumar, Madan B. Lokur

Citation;2014ALLMR(Cri)5226,2013CriLJ776,(2013)6SCC384,  

Criminal Appeal No. 2039 of 2012 (Arising out of 

SLP (Crl) No. 9475 of 2008)

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Landmark judgment of Supreme Court on the point of right to hearing to accused prior to order of issue process by Magistrate

We are in complete agreement with the view expressed by this Court in P. Sundarrajan1 , Raghu Raj Singh Rousha2 and A. N. Santhanam3 . We hold, as it must be, that in a revision petition preferred by complainant before the High Court or the Sessions Judge challenging an order of the Magistrate dismissing the complaint under Section 203 of the Code at the stage under Section 200 or after following the process contemplated under Section 202 of the Code, the accused or a person who is suspected to have committed crime is entitled to hearing by the revisional court. In other words, where complaint has been dismissed by the Magistrate underSection 203 of the Code, upon challenge to the legality of the said order being laid by the complainant in a revision petition before the High Court or the Sessions Judge, the persons who are arraigned as accused in the complaint have a right to be heard in such revision petition. This is a plain requirement of Section 401(2) of the Code. If the revisional court overturns the order of the Magistrate dismissing the complaint and the complaint is restored to the file of the Magistrate and it is sent back for fresh consideration, the persons who are alleged in the complaint to have committed crime have, however, no right to participate in the proceedings nor they are entitled to any hearing of any sort whatsoever by the Magistrate until the consideration of the matter by the Magistrate for issuance of process. We answer the question accordingly. The judgments of the High Courts to the contrary are overruled.

Criminal Procedure Code, 1973 - Sec. 202 - In the proceedings under the section, the accused/suspect is not entitled to be heard on the question whether the process should be issued against him or not - Upto the stage of issuance of process, the accused cannot claim any right of hearing.

Supreme Court of India

Manharibhai Muljibhai Kakadia & ... vs Shaileshbhai Mohanbhai Patel & ... on 1 October, 2012

Bench: R.M. Lodha, Chandramauli Kr. Prasad, Sudhansu Jyoti Mukhopadhaya 
REPORTABLE

Citation;2013CriLJ144,(2012)10SCC517

(2013)2GLR1440,  2013(2)PLJR22, 

2012(4)RCR(Criminal)689,

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