Quasi-Judicial Decisions Unsupported by Reasons and Failing to Adjudicate Jurisdictional Objections are Legally Unsustainable

The Petitioner (Standard Chartered Bank) challenged a decision by the Central Advisory Contract Labour Board (the Board) taken during its 90th meeting on 04.11.2016.

The dispute originated in 2002 when Respondent No. 3 (a minority union) alleged the Petitioner was illegally engaging contract labour.

In 2008, during its 72nd meeting, the Board accepted an inspection report and formally directed the case to be closed.

Following a 2009 High Court order, the Board revisited the matter and constituted a fresh inquiry committee.

On 09.05.2012, this Court passed a consent order directing the Board to hear all parties and specifically adjudicate the Petitioner's objections regarding the Board's jurisdiction to review its own 2008 closure decision.

However, in the 90th meeting, the Board merely noted the objections and directed the committee to proceed without providing a reasoned finding on the jurisdictional challenge.

1. Whether the Board’s decision to proceed with the inquiry, without adjudicating the Petitioner's jurisdictional objections, violated the High Court’s consent order dated 09.05.2012.

2. Whether the Board, as a quasi-judicial authority, was legally mandated to record reasons for its decision and consider written submissions filed by the parties.

Section 3 of the Contract Labour (Regulation and Abolition) Act, 1970 regarding the Board's constitution.

The power of review is not inherent and must be expressly conferred by statute, as held in Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji.

Necessity of reasoned orders in quasi-judicial functions under the principles of natural justice and the audi alteram partem rule, citing S.N. Mukherjee v. Union of India, A.K. Kraipak v. Union of India, and Siemens Engineering & Manufacturing Co. v. Union of India.

Comprehensive guidelines on transparency and judicial accountability from Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan.

The Court observed that the 2012 consent order specifically mandated the Board to "deal with" the Petitioner's jurisdiction and review-power objections in accordance with law.

Instead of adjudicating these foundational issues, the Board’s 90th meeting minutes merely recorded the arguments and jumped to a conclusion to proceed.

The Court reasoned that "dealing with" an objection necessitates an application of mind and a formal finding, which was absent here.

Additionally, the Board granted the Petitioner time to file written submissions but failed to advert to or consider them before circulating the minutes, rendering the hearing an "empty formality".

By failing to provide a "rational nexus" between the facts and the conclusion, the Board violated the doctrine of fairness and the specific directions of the High Court.

The matter was remanded to the Board with directions to: (i) decide the jurisdictional objection regarding the power of review as a threshold issue; (ii) pass a reasoned speaking order after considering all written and oral submissions; and (iii) stay all committee inquiry proceedings until the jurisdictional issue is resolved.