EX. ARMYMEN'S PROTECTION SERVICES P. LTD.versusUNION OF INDIA AND OTHERS

                      [2014] 3 S.C.R. 359


    EX. ARMYMEN'S PROTECTION SERVICES P. LTD.
                                 v.
               UNION OF !NOIA AND OTHERS
               (Civil Appeal No. 2876 of 2014)
                     FEBRUARY 26, 2014
                                                                       B
       [SUDHANSU JYOTI MUKHOPADHAYA AND
               KURIAN JOSEPH, JJ.]

     ADMINISTRATIVE LAW:
                                                                       c
       Security policy - Natural justice -- Airport - Ground
handling agency - Security clearance withdrawn in the interest
of national security - f-leld: What is in the interest of national
security is not a question of law - It is a matter of policy - It is
not for the court to decide whether something is in the interest       D
of State or not - It should be left to the Executive - In a
situation of national security, a party cannot insist for the strict
observance of the principles of natural justice - In such cases
it is the duty of the Court to read into and provide for statutory
exclusion, if not expressly provided in the rules governing the        E
field - The security clearance granted to the appellant for a
period of five years has already expired - It has become
unnecessary for this Court to go into more factual details and
consideration on merits.                                         '

     The ·instant appeal arose out of the order of the                 F
respondents withdrawing in the interest of national
security, the security clearance of the appellant company
for the ground handling services to Jet Airways in
~arious aerodromes including Patna. The question for
consideration before the Court was: On whether any                     G
reasonable restriction or limitation or exception to the
principle of the natural justice would be permissible in the
interest of national security.

                               359                                     H
    360      SUPREME COURT REPORTS              [2014] 3 S.C.R.

A         Disposing of the appeal, the Court

       HELD: 1.1 There are some exceptions to principles of
  natural justice. National security would generally include
  socio-political stability, territorial integrity, economic
  solidarity and strength, ecological balance, cultural
8
  cohesiveness, external peace, etc. What is in the interest
  of national security is not a question of law. It is a matter
  of policy. It is not for the court to decide whether
  something is in the interest of State or not. It should be left
C to the Executive. [para 11,15 and 16] [365-B; 367-C & D]
        Secretary of State for the Home Department v. Rehman
    (2003) 1 AC 153; Council of Civil Service Union and others
    v. Minister for the Civil Service (1985) AC 374; The Zamora
    (1916) II AC 77 - referred to.
D
        Administrative Law, 10th Edition, H.W.R. Wade & C.F.
    Forsyth, Pages-468-470 - referred to.

       1.3 In a situation of national security, a party cannot
  insist for the strict observance of the principles of natural
E justice. In such cases it is the duty of the court to read
  into and provide for statutory exclusion, if not expressly
  provided in the rules governing the field. Depending on
  the facts of the particular case, it will, however, be open
  to the court to satisfy itself whether there were justifiable
F facts, and in that regard, the court is entitled to call for
  the files and see whether it is a case where the interest
  of national security is involved. Once the State is of the
  stand that the issue involves national security, the court
  shall not disclose the reasons to the affected party. [para
G 17] [367-F-H]

       1.4 The security clearance granted to the appellant
  by order dated 17.04.2007 for a period of five years has
  already expired. In that view of the matter, it has become
H unnecessary for this Court to go into more factual details
  EX. ARMYMEN'S PROTECTION SERVICES P. LTD. 361
         v. UNION OF INDIA AND OTHERS
and consideration of the appeal on merits. [para 18 and                 A
19] [368-A & CJ
                        Case Law Reference:
      (1985) AC 374               referred to            para 12
                                                                        B
      (1916) II AC 77             referred to            para 13
      (2003) 1 AC 153             referred to            para 16

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2876 of 2014.                                                           c
     From the Judgment and Order dated 27.04.2010 of the
 High Court of Patna at LPA No. 60 of 2010.

      Samir Ali Khan for the Appellant.
                                                                        D
     Atul Nanda, Rameeza Hakeem, Amol N. Suryawashi,
 Parinay T. Vasandani, Law Associates, Sushma Suri for the
 Respondents.
      The Judgment of the Court was delivered by
                                                                        E
      KURIAN, J. 1. Leave granted.

      2. Natural justice is a principle of universal application. It
requires that persons whose interests are to be affected by
decisions, adjudicative and administrative, receive a fair and          F
unbiased hearing before the decisions are made. The principle
is traceable to the Fundamental Rights under Part Ill of the
Constitution of India. Whether any reasonable restriction or
limitation or exception to this principle is permissible in the
interest of national security, is the issue we are called upon to       G
consider in this case.
       3. The appellant was granted business of ground handling
  services on behalf of various airlines at different airports in the
  country. The ground handling service is subject to security
. clearance from the Central Government. Section 5 of the Aircraft      H
    362       SUPREME COURT REPORTS                 [2014] 3 S.C.R.

A Act, 1934 empowers the Government to make rules providing
  for licensing, inspection and regulation of aerodromes and, thus,
  Aircraft Rules, 1937 have been framed. Rule 92 proves for
  ground handling services. The Rule reads as follows:

B
          "92. Ground Handling Services- The licensee shall, while
          providing ground handling service by itself, ensure a
          competitive environment by allowing the airline operator at
          the airport to engage, without any restriction, any of the
          ground handling service provider who is permitted by the
          Central Government to provide such service:
c
          Provided that such ground handling service provider shall
          be subject to the security clearance of the Central
          Government."

D                                              (Emphasis supplied)

         4. For processing the security clearance, the Central
    Government created a Bureau of Civil Aviation Security
    (hereinafter referred to as 'BCAS'). As per circular No. 4 of
    2007 dated 19.02.2007 issued by BCAS, no ground handling
E   agency shall be allowed to work in any airport without prior
    security clearance obtained from BCAS. The appellant
    company was granted security clearance for a period of five
    years w.e.f. 17.04.2007. On the strength of such clearance, the
    appellant company entered into a contract with Jet Airways for
F   the ground handling services in various aerodromes including
    Patna. On 27.11.2008, the appellant company was informed
    that the security clearance had been withdrawn in national
    interest. That was challenged by the appellant company before
    the High Court of Judicature at Patna in CWJC No. 758 of
G   2009. The said writ petition was disposed of by judgment dated
    25.03.2009 directing the BCAS to afford a post decisional
    hearing. There was also a direction that the appellant should
    be furnished materials relied on by the respondents for
    withdrawal of the security clearance, without disclosing the
H   source of information. The BCAS accordingly passed order
EX. ARMYMEN'S PROTECTION SERVICES P. LTD. v. 363
    UNION OF INDIA AND OTHERS [KURIAN, J.]
dated 20.04.2009, holding the view that documents available             A
in the file were classified as 'secret' and the same could not
be shared with the appellant and, thus, order dated 27.11.2008
withdrawing the security clearance was affirmed. That was
challenged by the appellant in the High Court leading to
judgment dated 27.10.2009.                                              B

      5. The learned Single Judge called for the files and they
were produced in a sealed cover. According to the Single
Judge "the information that is available is an apology in support
of the action. There was nothing at all to justify any such
emergent action so as to avoid pre-decisional hearing". The             C
court was also of the view that the principles of natural justice
would have to be read into wherever any administrative action
visits a person with civil consequences, unless such procedure
is excluded by any Statute. However, the court also held that if
there are justifiable facts and there is threat to national security,   D
then, nobody, let alone the court, can insist on the compliance
of principles of natural justice as a pre condition for taking any
action resulting even in adverse civil consequences.'

     6. Learned Single Judge was also of the view that at least         E
gist of allegations should be disclosed so that the affected party
gets an opportunity to meet the same at the time of hearing. In
the absence of any such justifiable reason, the impugned order
was set aside and the writ petition was allowed.

      7. In the intra court appeal, thf:'. Division Bench of the High   F
Court also called for the files and after minute perusal of the
same, took the view that there were many more materials
available in the files which could not be .disclosed in national
interest to the appellant and hence, the impugned action was
justified. It was held that:                                            G

     " ... The learned single judge, after perusal of the
     allegations in the sealed cover, we are disposed to think,
     has not taken it seriously on the ground that the allegations
                                                                        H
    364      SUPREME COURT REPORTS                   [2014] 3 S.C.R.

A         were to please the politicians, etc the same is not actually
          correct. We have already. after perusal of the report, stated
          earlier that it contains many more things and the basic
          ingredients of security are embedded in it. The report is
          adverse in nature. It cannot be said to be founded on
B         irrelevant factors. We are disposed to think that any
          reasonable authority concerned with security measures
          and public interest could have taken such a view. The
          emphasis laid in the report pertains to various realms and
          the cumulative effect of the same is the irresistible
c         conclusion that it is adverse to security as has been
          understood by the authority. This court cannot disregard
          the same and unsettle or dislodge it as if it is adjudicating
          an appeal."

                                                (Emphasis supplied)
D
    and thus, the appeal was allowed setting aside the order
    passed by the learned Single Judge.

          8. Thus aggrieved, the appellant is before us.

E        9. By order dated 17.05.2010, while issuing notice, this
    Court stayed the operation of the impugned judgment of the
    Division Bench.

        10. Heard the counsels on both sides. The learned Single
F Judge, after going through the files, has taken one view and
  the Division Bench, after going through the entire files, some
  of which had not been noticed by the learned Single Judge, has
  taken another view. We do not find it necessary for this Court
  to go into the disputed contentions or on the different views
G taken by the High Court. We find that on principle of law, the
  High Court, be it through the learned Single Judge or the
  Division Bench, is of the same view. According to the learned
  Single Judge, if there are justifiable facts and national security
  is threatened, then, a party cannot insist nor any court can insist
H on compliance of principle of natural justice as a condition
EX. ARMYMEN'S PROTECTION SERVICES P. LTD. v_ 365
    UNION OF INDIA AND OTHERS [KURIAN, J.]

precedent to take adverse action. Though in different words,                    A
after having gone through the entire files, it is the same principle
that has been restated and reiterated by the Division Bench in
the impugned judgment.

     11. It is now settled law that there are some special
                                                                                8
exceptions to the principles of natural justice though according
to Sir William Wade1 , any restriction, limitation or exception on
principles of natural justice is "only an arbitrary boundary". To
quote further:

            "The right to a fair hearing may have to yield to C
      overriding considerations of national securitv. The House
      of Lords recognized this necessity where civil servants at
      the government communications headquarters, who had
      to handle secret information vital to national security, were
      abruptly put under new conditions of service which D
      prohibited membership of national trade unions. Neither
      they nor their unions were consulted, in disregard of an
      established practice, and their complaint to the courts
      would have been upheld on ground of natural justice, had
      there not been a threat to national security. The factor which E
      ultimately prevailed was the danger that the process of
      consultation itself would have precipitated further strikes,
      walkouts, overtime bans and disruption generally of a kind
      which had plagued the communications headquarters
      shortly beforehand and which were a threat of national F
      security. Since national security must be paramount. natural
      justice must then give way.

            The Crown must. however. satisfy the court that
      national security is at risk. Despite the constantly repeated
      dictum that 'those who are responsible for the national                   G
      security must be the sole judges of what the national
      security requires', the court will insist upon evidence that
      an issue of national security arises, and only then will it
1.   Administrative Law, 10'" Edition, H.W.R. Wade & C.F. Forsyth, Pages-468-   H
     470.
     366        SUPREME COURT REPORTS                   [2014] 3 S.C.R.


A          accept the opinion of the Crown that it should prevail over
           some legal right. ... "

                                                  {Emphasis supplied)

        12. In Council of Civil Service Union and others v. Minister
B for the Civil Service 2, the House of Lords had an occasion to
  consider the question. At page-402, it has been held as follows:

           : ... The decision on whether the requirements of national
            §ecurity outweigh the dutv of fairness in any particular case
c           is for the Government and not for the courts: the
           Government alone has access to the necessary
           information. and in any even the judicial process is
            unsuitable for reaching decisions on national security. But
           if the decision is successfully challenged. on the ground
           ~hat it has been reached by a process which is unfair. then
D
           the Government is under an obligation to produce evidence
           .that the decision was in fact based on ground of national
           secun•tv .... "

                                                  (Emphasis supplied)
E
        13. The Privy Council in The Zamora3 , held as follows at
    page-107:

           "... Those who are responsible for the national security
           must be the sole judges of what the national security
F
           requires. It would be obviously undesirable that such
           matters should be made the subject of evidence in a Court
         . of law or otherwise discussed in public."
           14. According to Lord Cross in Alfred Crompton
G Amusement Machines                  v.   Customs       and    Excise
  Commissioners (No.2)4:

    2.   (1985) AC 374.
    3.   (1916) II AC 77.
H   4.   (1974) AC 405, Page- 434.
 EX. ARMYMEN'S PROTECTION SERVICES P. LTD. v. 367
     UNION OF INDIA AND OTHERS [KURIAN, J.]
       " ... In a case where the considerations for and against           A
       disclosure appear to be fairly evenly balanced the courts
       should I think· uphold a claim to privilege on the grounds
       of public interest and trust to the head of the department
       concerned to do whatever he can to mitigate the effects
       of non-disclosure .... "                                           B

      15. It is difficult to define in -exact terms as to what is
 national security. However, the same would generally include
 socio-political stability, territorial integrity, economic solidarity
 and strength, ecological balance, cultural cohesiveness, external        C
 peace, etc.

      16, ,What is in the interest of national security is not a
· question of law. It is a matter of policy. It is not for the court to
  decide whether something is in the interest of State or not. It
  should be left to the Executive. To quote Lord Hoffman in               D
 Secretary of State for the Home Department v. Rehman 5 :
       " ... in the matter of national security is not a question of
       law. It is a matter of judgment and policy. Under the
       Constitution of the United Kingdom and most other                  E
       countries, decisions as to whether something is or is not
       in the interest of national security are not a matter for
       judicial decision. They are entrusted to the executive."

       17. Thus, in a situation of national security, a party cannot
 insist for the strict observance of the principles of natural justice.   F
 In such cases it is the duty of the Court to read into and provide
 for statutory exclusion, if not expressly provided in the rules
 governing the field. Depending on the facts of the particular
 case, it will however be open to the court to satisfy itself whether
 there were justifiable facts, and in that regard, the court is           G
 entitled to call for the files and ~ee whether it is a case where
 the interest of national security is involved. Once the State is
 of the stand that the issue involves national security, the court
 shall not disclose the reasons to the affected party.
 5.   ~2003) 1 AC 153.                                                    H
    368        SUPREME COURT REPORTS                  (2014] 3 S.C.R.


A        18. Be that as it may, on facts we find that the security
    clearance granted to the appellant by order dated 17.04.2007
    for a period of five years has already expired. To quote:

                  "I am directed to inform you that background check
B          or the company has been conducted and nothing adverse
           has been found Companies security clearance shall be
           valid for a period of five years from the date of this letter
           at the end of which a fresh approval of this Bureau is
           mandatory."
c                                                (Emphasis supplied)

          19. In that view of the matter, it has become unnecessary
    for this Court to go into more factual details and consideration
    of the appeal on merits. The same is accordingly disposed of.
D          20. There is no order as to costs.
    R.P.                                         Appeal disposed of.