Doctrine of Fairness - Advocate Kasana

The word doctrine is to be understood with legal concept as legal doctrines. Previously it was considered as the opinions of Catholic Church. But today the idea of doctrines have changed, it has evolved with the establishment of legal principles by different constitutions and courts. These are established legal principles by competent authority and are followed for long period for administration of justice.[1] These doctrines help to interpret the statutes in a better way and provide justice. Doctrine of fairness is one such doctrine that helps in interpretation of statute. It deals with administrative aspect of the law. It would mean that any work done is expected to be done with reasonable fairness. The meaning of this doctrine can be understood in a wider sense along with doctrine of legitimate expectation, Article 14 and corporate governance.

Background

This doctrine was developed in America. There were private systems for broadcasting being established these rights were only provided when it served the purpose of public interest. [2] As the license was given to private individuals as well and also the visual media is more powerful so it needed to be regulated in regards to use the airwaves and the content of the programmes and to prevent monopoly of information and views. So, there was a need to have a central agency representative of all sections of the society free from control both of the Government and the dominant influential sections of the society. The only limitation was the limitation of resources and the need to use them for the benefit of all. When, however, there are surplus or unlimited resources and the public interests so demand or in any case do not prevent telecasting, the validity of the argument based on limitation of resources disappears. As broadcasting is a costly affair only a few will be in a position to use it to subserve their own interest by manipulating news and views. That also poses a danger to the freedom of speech and expression. So due to this doctrine of fairness has been evolved in the US.[3]

U.P. Financial Corpn. v. Gem Cap (India) (P) Ltd.,[4]

It was said in the case that Fairness is not a one way street. This would mean that in order to invoke doctrine of fairness there should be fairness from both the parties.

Excise Commr. v. Issac Peter,[5]

It was argued on the point that it is the duty of the state to take reasonable actions and doctrine of fairness should be applied in cases related to the contracts where state is the party. But in this case a three judge bench decided that the doctrine cannot be applied on contracts related to state matters.

Zee Telefilms Ltd. v. Union of India,[6]

Though in this case it was held that BCCI is not a state it also said that, “the object of Part III of our Constitution is to curtail abuse of power and if by reason of the Board’s activities, fairness in action is expected,” This would mean that there is some level of fairness expected by the working of administration.

Tata Iron & Steel Co. Ltd. v. Union of India,[7]

In this case court while stating it’s opinion said that,

“ …it would neither be fair nor reasonable nor in consonance with the concept of justice, equity and good conscience … Doctrine of fairness and the duty to act fairly is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice. It is a principle of good conscience and equity since the law courts are to act fairly and reasonably in accordance with the law…. Doctrine of unreasonableness is opposed to doctrine of fairness and reasonableness will have its play, if allowed. The happening of an event has not taken place, can it be said irrespective of such an event reimbursement is to be allowed? The answer, however, cannot but be in the negative…”[8]

This would mean that doctrine of fairness and reasonableness goes hand in hand it becomes the duty of administration to act fairly. Also, it is the principle of equity and good conscience to act fairly and reasonably.

Connection of Doctrine of Fairness and Natural Justice

Haryana Financial Corpn. v. Jagdamba Oil Mills,[9]

In this case J. Arijit Pasayat,

“The fairness required of the Corporations cannot be carried to the extent of disabling them from recovering what is due to them. …..in the matter of action by the Corporation in exercise of the powers conferred on it under Section 29 of the Act, the scope of judicial review is confined to two circumstances i.e. (a) where there is statutory violation on the part of State Financial Corporation, or (b) where State Financial Corporation acts unfairly i.e. unreasonably.”[10]

This would mean that if the act is unreasonable then it is unfair.

In the same case it was also said that,

“The obligation to act fairly on the part of the administrative authorities was evolved to ensure the rule of law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the quasi-judicial authorities are bound to observe. It is true that the distinction between a quasi-judicial and the administrative action has become thin, as pointed out by this Court … The court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the court intervene.”

This would mean that doctrine of fairness is related to the concept of natural justice and the administrative body needs to follow those and only when the acts of administrative authority is so unfair and is so unreasonable that a reasonable human being would not follow then courts can take that there is no principle of realism attached to it.

Connection of Doctrine of Fairness and Article 14.

Article 14 talks about the equality before law and equal protection of law. This would mean that in order to invoke doctrine of fairness there should be fairness from both the parties. Article 14 includes two broad principles i.e. intelligible differentia and absence of arbitrary power. So, when we are talking about an act which has no intelligible differentia or the decision is taken by administration is arbitrarily it would not be fair towards one party. This would always create a matter where act done by the administration is unfair because of arbitrary use of power.

For eg in case of Air India v. Nargesh Mirza, the decision taken by the Managing Director to extend the date of retirement or not if taken arbitrarily i.e without any appropriate reason then it would be an unfair decision taken by the administrative authority and could be volatile of doctrine of fairness.

Connection of Doctrine of Fairness and Corporate Governance

As mentioned in the case of Haryana Financial Corpn. v. Jagdamba Oil Mills,[11] that the board needs to be fair in their administration. One of the pillars of corporate governance is fairness and transparency so if the acts of the corporation are fair to its entire stakeholder and is complying with the laws. The companies need to submit a corporate governance report. Now all these regulations came into force because of the scams and scandals that were taking place like the Satyam scandal and the administration needed to be more fair and transparent in their working.

Conclusion

It is noted that the doctrine of fairness cannot be read alone but along with doctrine of reasonableness and doctrine of legitimate expectations. It cannot be invoked in the court as a separate cause of action but if a person did not act in a fair manner and that led to certain legal damage to the person then this doctrine can be considered. This doctrine even binds the court to act in a fair and reasonable manner. This doctrine has a broad scope but is also limited to certain extent as it is not applicable in the cases where there is a contract with the state.

[1] Bolla, Dr., Mohan. (2017). The Doctrinaire Trident Testing Constitutionality of the Laws. SSRN Electronic Journal. 10.2139/ssrn.3090334.

[2] Kathleen Ann Ruane,’ Fairness Doctrine: History and Constitutional Issues’, Congressional Research Service.

[3] Secy., Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal, (1995) 2 SCC 161 at page 226.

[4] (1993) 2 SCC 299.

[5] (1994) 4 SCC 104.

[6] (2005) 4 SCC 649.

[7] (2001) 2 SCC 41.

[8] Id. at page 53.

[9] (2002) 3 SCC 496.

[10] Id. at page 506.

[11] (2002) 3 SCC 496.