Holding

A summary dismissal of an appeal without reasons is invalid; the High Court must give a reasoned order indicating an application of mind, and the order was set aside.

Summary

The Commissioner under the Workmen's Compensation Act, 1928 awarded compensation to the claimant and directed National Insurance Co. Ltd. to pay. The insurer appealed the award under section 30 of the Act. The Allahabad High Court dismissed the appeal summarily, without giving any reasons and without addressing the substantial question of law concerning the insurer's liability and the quantum of compensation. The Supreme Court held that a reasoned order is essential to demonstrate the application of mind, especially when the order is open to further challenge and involves a substantial question of law. Consequently, the High Court’s summary dismissal was set aside and the matter was remitted to the High Court for fresh consideration with a requirement to record reasons. The appeal was allowed, and no order as to costs was made.

Issues considered

Whether a High Court can dismiss an appeal summarily without recording reasons.
Whether the High Court must give a reasoned order when the appeal raises a substantial question of law under the Workmen's Compensation Act, 1928.
Whether the insurer is liable to pay compensation under sections 20 and 30 of the Act.

Subjects

Workmen's Compensationsummary dismissalreasoned orderapplication of mindsubstantial question of lawnatural justiceappellate jurisdiction

Judgment

[2008] 11 S.C.R. 315

... NATIONAL INSURANCE CO. LTD. A
v.
GULAB NABI AND ANR.
(Civil Appeal No. 4629 of 2008)
JULY 24, 2008
B
--J. [DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM
SHARMA, JJ.)

Judgment/Order - Reasoned order - Requirement of -
Summary dismissal of appeal by High Court - Challenge to c
- Held: Reasons introduce clarity in an order - High Court
should have given reasoned order, indicative of its applica-
tion of mind - More so, appeal not dealt with properly, when it
raised substantial question of law - Thus, order of High Court
set aside - Matter remitted to High Court for fresh consider-
D
ation - Workmen's Compensation Act, 1928- s. 30.
~ ...
Under the Workmen's Compensation Act, 1928, the
Commissioner awarded compensation to respondent no.
1 and directed the appellant-insurance company to make
the payment. Appellant challenged the award by filing E
appeal u/s 30 of the Act. High Court dismissed the appeal
summarily. Hence, the present appeal.
Allowing the appeal and remitting the matter to High
Court, the Court
F
HELD: 1.1 In the instant case, the question for con-
~ sideration by the High Court was whether the Insurance
Company has a liability and, if so, what is the quantum.
There is no suitable evidence so far as income of the de-
ceased is concerned. Non-application of mind is clear
G
from the fact that since the State was not a party, the ques-
,,
---- tion of hearing the counsel for the State did not arise.
.........
' Therefore, the order was passed without any application
of mind. The order is also non-reasoned. [Paras 6 and 7]
[317-E,F,G]
315 H
t
1·
r
316 SUPREME COURT REPORTS [2008] 11 S.C.R.

A 1.2 Reasons introduce clarity in an order. On plain-
est consideration of justice, the High Court ought to have .·
set forth its reasons, howsoever brief, in its order in,dica-
tive of an application of its mind, all the more when its
order is amenable to further avenue of challenge. Further-
s more, the manner in which the appeal was dismissed is
not the proper course while dealing with the appeal when
it raised substantial question of law. Thus, the order of
the High Court is set aside. The matter is remitted to it for
fresh consideration in accordance with law. [Paras 8, 10
and 11] [317-H, 318-A,E,F,G]
c
· Breen v. Amalgamated Engg. ·Union 1971 (1) All ER L.

1148; Alexander Machinery (Dudley) Ltd. v. Crabtree 1974
ICR 120 (NIRC) - referred to.
Case Law Reference
D
1971 (I) ALL ER 1148 Referred to. Para 9
). -f"'!I
..
}

1974 ICR 120 (NIRC) Referred to. Para ~
I)
. CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4629
of 2008 I
E I
...
From the final Judgment and Order dated 30~3.2008 of .i
the High Court of Judicature at Allahabad in First Appeal from
Order No. 836 of 2006

F
M.K. Dua, Kishore Rawat and Dhiraj for the Appellant.
The Judgment of the Court was delivered by
,1....
I
1-
'
.Dr. ARIJIT PASAYAT, J. 1. Leave granted.
· 2. ·Challenge in this appeal is to the order passed by a
Division Bench of the Allahabad High Court dismissingthe-ap-
G peal filed by the appellant summarily. '
. L.
3. The appeal was filed under Section ~O of the Workmen's
Compens~tion Ac't, 1928 (in short the 'Act'). The primcirY stand
taken by the appellant was that the claimant had not established
the employer employee relationship so far as the insur~d de-
H
. - NATIONAL INSURANCE CO. LTD. v. GULAB NABI 317

.. & ANR. [DR. ARIJIT PASAYAT, J.]

ceased is concerned. It was also pointed out that there is no A
evidence to show that the deceased had sustained injuries un-
der the employment and in the course of employmen! of the
deceased insured.
4. A Claim Petition was filed under Section 4 of the Act
against owner of the offending vehicle and the appellant-Na- B
•-'
tional Insurance Co. The Commissioner directed payment of'
Rs.2,68,800/-to respondent No.1 along with interest@12%. In
terms of Section 20 of the Act, the appellant-National Insurance
Company was directed for payment to respondent No.1. The
award made by the Commissioner was questioned before the c
High Court in an appeal which came to be dismissed summarily,
in the following manner:
"Heard learned counsel for the appellant and learned
Standing Counsel for the State.
D
The appeal has got no force.
w- -4.,
The appeal is dismissed."
5. Learned counsel for the appellant submitted that it was
not a case where no substantial question of law is involved. In
fact, the acceptability of the evidence in view of various con- E
cessions made by the claimant has been completely lost sight
by the High Court.
6. There is no appearance on behalf of respondents. As
rightly contended by learned counsel for the appellant, the ques-
tion whether the Insurance Company has a liability arid, if so, F
j
what is the quantum was under consideration by the High Court.
There is no suitable evidence so far as income of the deceased
is concerned.
7. Non-application of mind is clear from the fact that since
G
the State was not a party, the question of hearing the learned
Standing Counsel for the State does not arise. The order there-
........ fore has been passed without any application of mind. The or-
der is also non-reasoned.

8. Reasons introduce clarity in an order. On plainest con- H
I
318 SUPREME COURT REPORTS [2008] 11 S.C.R.
. '
;;...
A sideration of justice, the High Court ought to have set forth its
reasons, howsoever brief, in its order indicative of an applica-
tion of its mind, all the more when its order is amenable to fur-
ther avenue of challenge.
9. Even in respect of administrative orders Lord Denning,
B M.R. in Breen v. Amalgamated Engg. Union (1971. (1) All ER
\.-·
1148) observed: (All ER p.1154h) The giving of reasons is one
of the fundamentals of good administration.' In Alexander Ma-
chinery (Dudley) Ltd. v. Crabtree (1974 ICR 120 (NIRC) it was
observed: 'Failure to give reasons amounts to denial of justice.
c Reasons are live links between the mind of the decision-taker to
the controversy in question and the decision or conclusion ar-
rived at.' Reasons substitute subjectivity by objectivity. The em-
phasis on recording reasons is that if the decision reveals the
'inscrutable face of the sphinx', it can, by its silence, render it
virtually impossible for the courts to perform their appellate func-
D
tion or exercise the power of judicial review in adjudging the va-
lidity of the decision. Right to reason is an indispensable part of !-·' -¥
,,....
a sound judicial system, reasons at least sufficient to indicate an
application of mind to the matter before court. Another rationale
is that the affected party can know why the decision has gone
E against him. One of the salutary requirements of natural justice is
spelling out reasons for the order made, in other words, a speak-
ing-out. The 'inscrutable face of the sphinx' is ordin~r:!y incongru-
ous with a judicial or quasi-judicial performance.
10. The manner in which the appeal has been dismissed
F is not the proper course while dealing with the appeal when it
rc;iised substantial question of law.
11. Above being the position, we set aside the order of the
High Court. The matter is remitted to it for fresh consideration in
accordance with law. The parties are directed to place fresh evi- ,...
G dence and materials before the High Court for the purpose of /

adjudication for disposing of First Appeal No. 836 of 2006.
12. The appeal is allowed but in the circumstances with-
__._ ....
out any order as to costs.
H N.J. Appeal allowed.