Name of the Student : ARAVINDH M

Registration Number : 18DBLBT004

Programme : ADMINISTRATIVE LAW

Semester : VI SEMESTER

Course : LLB

Course Code : 5BLB401

Component : RESEARCH PAPER

Date of Submission : 03/07/2021

Submitted to : Prof. ARUNA

 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher who gave me the
goldenopportunity to do this wonderful research on the topic, “DOCTRINE OF
NECESSITY”, which also helped me in doing a lot of Research and I came to know
about so many new things.

Secondly I would also like to thank my parents and friends who helped me a lot in
finalizingthis project within the limited time frame.

THANKS AGAIN TO ALL WHO HELPED ME.

 ABSTRACT

In field of administrative law, doctrine is nothing but the set of rules, framework, test,
or procedural steps via the common law precedent using which the judgements can be
determined for particular case. When judge defines the ruling, doctrine comes in place
in which process is outlined as well as applied. This process is then further equally
applied on all other cases. When enough judges make use of the process soon enough it
becomes established as the de facto method of deciding like situations. In this paper,
we are presenting the study on different doctrines such as doctrine of necessity,
doctrine of legitimate expectations, and doctrine of delegation with respect to
administrative law.

INTRODUCTION

Doctrine of Necessity

The term Doctrine of Necessity is a term used to describe the basis on which
administrative actions by administrative authority, which are designed to restore
order, are found to be constitutional. The maxim on which the doctrine is based
originated in the writings of the medieval jurist Henry de Bracton, and similar
justifications for this kind of administrative action have been advanced by more recent
legal authorities, including William Blackstone. In modern times, the term was first
used in a controversial 1954 judgment in which Pakistani Chief Justice Muhammad
Munir validated the extra constitutional use of emergency powers by Governor
General, Ghulam Mohammad. In his judgment, the Chief Justice cited Bracton's
maxim, 'that which is otherwise not lawful is made lawful by necessity, thereby
providing the label that would come to be attached to the judgment and the doctrine
that it was establishing. The Doctrine of Necessity has since been applied in a number
of Commonwealth countries, and in 2010 was invoked to justify administrative actions
in Nepal. What is objectionable is not whether the decision is actually tainted with bias
but that the circumstances are such as to create a reasonable apprehension in the
minds of others that there is a likelihood of bias affecting the decision. The basic rule
underlying this principle is that „Justice must not only be done but must also appear to
be done‟.

Definition of Doctrine of Necessity

The Doctrine of Necessity is a principle used in bankruptcy law which permits the use of
certain provisions of the Code or common law ostensibly in contradiction to other law in
order to accomplish a vital objective in a bankruptcy case. The Doctrine exists simply
because it works. The proper use of the Doctrine helps to stabilize a debtor's business
relationships without significantly hurting any party.

Bases of the Doctrine

Historical Basis
It is important to understand the history of the Doctrine of Necessity, since the parameters ofthe
Doctrine are still undergoing active development in the bankruptcy courts. A related doctrine,
the Necessity of Payment Rule, applies in railroad cases and has existed at least since 1882.
Although the two doctrines are different, the Doctrine of Necessity is a natural evolution of the
Necessity of Payment Rule. The principle underlying both doctrines is the same. Sometimes
immediate payment to a prepetition creditor will make the creditors as a group better off. The
United States Supreme Court first articulated the Necessity of Payment Rule in Miltenberger v.
Logansport Railway.' In Miltenberger, interline railroads threatened to cease furnishing supplies
and interline traffic exchanges unless the railroad receiver immediately paid pre-receivership
claims.2 The Supreme Court affirmed the circuit court order directing the railroad receiver to
pay the pre-receivership claims prior to reorganization. The Court found that such payments are
"necessary ... where a stoppage of... [Indispensable] business relations would be a probable
result. Modem cases continue to apply the Necessity of Payment Rule in railroad
reorganizations. In re Boston and Maine Corp; the court defined the Necessity of Payment Rule
as "the existence of a judicial power to authorize trustees in reorganization to pay claims where
such payment is exacted as the price of providing goods or services indispensably necessary to
continuing the rail service Similarly, in re Lehigh and New England Railway Co., the court
declared that "the 'necessity of payment' doctrine ... [permits] immediate payment of claims of
creditors where those creditors will not supply services or material essential to the conduct of
the business until their pre-reorganization claims shall have been paid. The Third Circuit went
on to note that "the sine qua non for the application of the 'necessity of payment' doctrine is the
possibility that the creditor will employ an immediate economic sanction, failing such
payment."' The Necessity of Payment Rule is periodically confused with another principle of
railroad reorganizations, the Six Months Rule, codified in subsection 1171(b) of the Code's
railroad reorganization subchapter.9 The Six Months Rule was recognized in subsection 77(b) of
the Bankruptcy Act, 10 and Congress may have intended that subsection 1171(b) operate to
continue the Six Months Rule. 1 ' The Six Months Rule permits claims for services and goods
supplied to a railroad six months before filing to be paid as administrative expense priority
claims.12 The Six Months Rule requires that "the creditor must have expected to be paid out of
the current operating receipts of the railroad rather than from the general credit of the railroad"
and that "a current debt fund must exist."' 13 The debt fund is limited to "current or surplus
earnings during the six months prior to reorganization and during reorganization; unmortgaged
assets of the debtor; and income diverted for the benefit of mortgagees of the debtor during the
reorganization or the six months prior to the reorganization."' 4 These factors are rarely found in
modern Chapter 11 cases. There are important distinctions between the Doctrine of Necessity,
the Necessity of Payment Rule and the Six Months Rule. The Six Months Rule and the Necessity
of Payment Rule apply only to railroad reorganizations and not to businesses generally. They
have no counterpart in Chapter 11 non-railroad reorganizations.

Railroad reorganizations present a particular set of circumstances, such as the impact

of Interstate Commerce Commission regulations and the Railway Labour Act that is
not wholly present in Chapter 11 business reorganizations. The Necessity of Payment
Rule applies only to essential goods or services and not to employee wages or benefits.
It applies only to avoid creditors' threatened economic sanctions and not to avoid a
harsh result on retirees, employees, or consumers. The Necessity of Payment Rule and
its litigated cases dwell on payment to creditors, rather than to employees, and it does
not involve the problems of foreign creditors or tort victims. Whereas the Necessity of
Payment Rule is a rule of payment,the Six Months Rule is one of priority. The rationale
for the Six Months Rule is that suppliers' claims accruing post-petition will also receive
an administrative expense priority.
The rationale for the Necessity of Payment rule is that, unless the trustee pays a
prepetition claim, the claimant will cease providing the railroad with essential goods or
services indispensably necessary to continued operations. Nonetheless, the Necessity
of Payment Rule and the Doctrine of Necessity share the same underlying policy
rationale. Both principles are premised on the bankruptcy goal of maintaining the
prospects for a viable reorganization during the early stages of a case. Both principles
embody the fact that there are some prepetition creditors who must be paid
immediately because if they are not paid, everyone else will suffer. Certain prepetition
debts is necessary to achieve an effective early reorganization, both legal principles
authorize payment. The Necessity of Payment Rule is not coextensive with the
Doctrine of Necessity; rather, it is the historical basis from which courts have begun to
fashion a legal principle responsive to the unique needs of parties.

Evolution of the Doctrine of Necessity

The term Doctrine of Necessity is a term used to describe the basis on which
administrative actions by administrative authority, which are designed to restore
order, are found to be constitutional. The maxim on which the doctrine is based
originated in the writings of the medieval jurist Henry de Bracton, and similar
justifications for this kind of administrative action have been advanced by more
recent legal authorities, including William Blackstone.
In modern times, the term was first used in a controversial 1954 judgment in which
Pakistani Chief Justice Muhammad Munir validated the extra-constitutional use of
emergency powers by Governor General, Ghulam Mohammad. In his judgment, the
Chief Justice cited Bracton'smaxim, 'that which is otherwise not lawful is made lawful

by necessity', thereby providing the label that would come to be attached to the
judgment and the doctrine that it was establishing.

The Doctrine of Necessity has since been applied in a number of Commonwealth

countries,and in 2010 was invoked to justify administrative actions in Nepal.
What is objectionable is not whether the decision is actually tainted with bias but that the
circumstances are such as to create a reasonable apprehension in the minds of others that there
is a likelihood of bias affecting the decision. The basic rule underlying this principle is that
„Justice must not only be done but must also appear to be done‟.
Necessity excludes bias
An adjudicator who is subject to disqualification on account of bias may
nevertheless, canvalidly adjudicate if:
1) No other person competent to adjudicate is available;
2) A quorum cannot be formed without him; or
3) No other competent tribunal can be constituted.

In such situation the rule against bias has to give way to the necessity. If the choice is
between allowing a biased person to adjudicate or to stifle the action altogether, the
choice must fall in favour of the former, as it is the only way to promote decision-
making. Where statute empowers a particular minister or official to act, he will
naturally be the one and the only person who can do so. There is no way escaping the
responsibility, even if he is personally interested. Transfer of responsibility is, indeed
a recognized type of ultra-virus. In one case it was unsuccessfully argued that the only
minister competent to confirm a compulsory purchase order for land for an airport
had disqualified himself by showing bias and that the local authority could only apply
local act of parliament. A governor of a colony may validly assent to an act of
indemnity for his own actions since otherwise the act could not be passed at all.

Bias would not disqualify an officer from taking an action if no other person is
competent to act in his place. This exception is based on the doctrine which it would
otherwise not countenance on the touchstone of judicial propriety. The doctrine of
necessity makes it imperative for the authority to decide and considerations of judicial
propriety must yield. It can be invoked in cases of bias where there is no authority to
decide the issue. If the doctrine of necessity is not allowed full play in certain
unavoidable situations, it would impede the course of justice itself and the defaulting
party would benefit from it. If the choice is between either to allow a biased person to
act or to stifle the action altogether, the choice must fall in favor of the former as it is
the only way to promote decision-making. Therefore, the Court held that bias would
not vitiate the action of the Speaker in impeachment proceedings and the action of the
Chief Election Commissioner in election matters.
In the USA, the disqualification arising out of bias arises from the due process of the
American Constitution. Therefore, an administrative action can be challenged in
India andEngland. Recent trends in the judicial behaviour of the American Supreme
Court also indicate that where the administrative authority prejudged the issue, the
action will be vitiated.
However, the term „bias‟ must be confined to its proper place. If bias arising out of preconceived
notions means the total absence of preconceptions in the mind of the judge, then no one has
ever had a fair trial, and no one ever will. Therefore, unless the preconceived notions are such
that it has the capacity of biasing the mind of the judge, administrative action would not be
vitiated.

Judicial Decisions
In Gullapali Nageshwar Rao v State of Andhra Pradesh, as a consequence of Gullapali 1
case, fresh notices were issued to invite the affected parties to come with fresh issues
regarding their grievances about the bus route‟s nationalization policy to be heard by
the Andhra Pradesh Chief Minister, who was also a Transport Minister. Chief Minister
heard the objections, rejected them, and ordered for implementation of the policy. The
order was challenged on the newly found grounds of „official bias‟ along with the
precedent of Gullapali1 in aid. High Court rejected the contention of official bias.
Supreme Court upheld the decision of High Court. Secretary was held to be a part of
the Ministry but Minister was not held to be a part of the Minister. The Statute
empowered the Chief Minister to hear the grievances and pass necessary orders in this
case, and the question is that if he would not do it, then who else would. Supreme
Court, in this landmark judgment, impliedly provides for Doctrine of Necessity but
does not expressly state it.

According to Wade, “Ministerial and Departmental policy cannot ve

regarded as adisqualifying bias”

In J. Mahopatra and Co. v State of Orissa the contention of doctrine of necessity was
rejected by the Supreme Court on the ground that though members of the
subcommittee were appointed by virtue of their official positions, they were holding
positions in the secretary education department of the government of Orissa and the
director higher education etc.

There was, however, nothing to prevent those whose books were submitted for
selection from pointing out this fact to the state government so that it could amend its
resolution by appointing a substitution or substitutes as the case may be. There was
equally nothing to prevent such non-official author members from resigning from the
committee on the ground of their interest in the matter.

In Institute of Chartered Accountants v. L.K. Ratna the court held that in absence of
statutorycompulsion the principles of necessity does not apply.

In Ashok Kumar Yadav v State of Haryana, Supreme Court showed that Doctrine of
Necessity acts as an exception to official bias. During the selection process in Haryana
State Public Service Commission, relative of the member of the Selection Board was
interviewed and later personal relationship was alleged as a ground to strike down the
decision of the Selection Board. There can be no doubt that if a selection committee is
constituted for the purpose of selecting candidates on merits and one of the members
of the Selection Committee is closely related to a candidate appearing for selection, it
would not be enough for such member merely to withdraw altogether from the entire
selection process and ask the authorities to nominate another person in his place on
the selection committee, because otherwise all the selection made would be vitiated on
account of reasonable likelihood of bias affecting the process of selection. But the
situation here is different as the selection of candidates to Haryana Civil Service
(Executive) and allied services, is not done by a selection committee made for the
purpose but is provided for by Article 316 of the Constitution of India.
Hence, the same principle as in case of personal relationship cannot be applied in this
case. If a member of Public Service Commission were to withdraw altogether from the
selection making process on the ground that a close relative of his appearing for
selection, no other person save a member can be substituted in his place. And it may
also happen sometimes that no other member is available at all and hence functioning
of Public Service Commission may be affected. In this case hence, Supreme Court
Invoked the Doctrine of Necessity expressly and held that the decision by the
Committee valid and untarnished by any sort of bias.
Chinappa Reddy, J took the same stand in deciding another such similar case Javid
RasoolBhatt v State Of Jammu and Kashmir.

In Tata Cellular v Union of India, Government of India issued invitations to all the
mobile operators to establish networks in the four metro cities. Evaluation Committee
which was supposed to evaluate the tenders under Telecom Regulatory Authority of
India (TRAI), had Director General of Telecommunication in it. His son‟s tender was
selected at the end of the evaluation process. In this case, Supreme Court rejected the
violation of „Nemo judex in causa sua‟ as without Director General of Communication
no tender can be selected and evaluation is not possible. There was no choice of
substitution and hence the decision was not liable to be struck down. In this case
Supreme Court applied the Doctrine of Necessity liberally. Stringent rules were laid
down by the Supreme Court in Election Commission of India v. Dr. Subramanian
Swami.

In Election Commission of India v. Dr. Subramanian Swami it was observed that in a

multi- member commission when the chief election commission is found to have
likelihood of bias, his participation is not mandatory and the doctrine of necessity will
not apply. The proper course for him was that he could call for a meeting and
withdrew from the meeting leaving it to the other members to decide. In case there was
any difference between them, then doctrine of necessity would apply. In this case,
Supreme Court changed “Doctrine of Necessity” to “Doctrine of absolute Necessity”
meaning thereby that this doctrine can be invoked only in cases of „absolute‟ necessity.

Similarly in Badrinath v. Govt. of Tamil Nadu the joint screening committee, which
was headed by one Shri V. Kathikeyan Chief Secretary to the Government, against
whom the appellant has filed writ petition before the Tamil Nadu High Court seeking
sanction for prosecuting him for defamation? The writ petition was dismissed but the
Division Bench allowed the appeal and the Supreme Court confirmed the same. While
the litigation was pending the joint screening committee so constituted did not found
the appellant fit for promotion to super time scale. The contention of the appellant was
that the said joint screening committee was grossly biased against him as dropped
disciplinary proceedings against the appellant was given undue importance though
positive aspects of his career were not incorporated in his CRs. The Supreme Court
found Shri V. Kathikayan biased against the appellants. The doctrine of necessity was
contended as Shri V. Karthikeyan was the chief secretary and as per office order, the
screening committee has to consist of (i) the chief secretary to its government; (ii) the
first member, board of revenue and (iii) second secretary to the government.
“It may be noticed that where a statute or statutory rule constitutes a designated
authority to take administration or quasi judicial decisions and where the person
concerned is disqualifiedto take decision on the principle of likelihood of bias then law
(in certain circumstances) makes an exception in situation and the said person is
entitled to take a decision notwithstanding his disqualification, for otherwise no
decision can be taken by anybody on the issue and public interest will suffer. But the
position in present case is that there is no statutory rule compelling the chief secretary
to be a member of the screening committee. If the committee is constituted under
administrative order and a member is disqualified in a given situation vis-à-vis a
particular candidate whose promotion is in question, there can be no difficulty in his
rescuing himself and requesting other senior official to substitute in his place in the
committee. The disqualified member could leave it to the other two to take decision. In
case, however, they differ then the authority, which constituted the committee could be
requested to nominate third member”.

This principle is well settled.

In Amaranth Chaudhary v. Braithwaite and Co. the appellant was employee of the
respondent, certain charges were levelled against him and the inquiry committee
conducted an enquiry proceeding. The inquiry committee after making an enquiry
against the appellant found the charge against him proved. The inquiry committee
submitted its report to the disciplinary authority. The disciplinary authority was the
Chairman cum Managing Director. He accepted the report of the inquiry committee
and ordered removal of the appellant from service. Under regulation framed by the
company an appeal against order of the disciplinary authority lies before the board of
directors of the company. The appellant moved appeal before the board, which was
presided over by the Chairman cum Managing Director who was Shri S. Krishnaswami,
who was also the disciplinary authority. The board dismissed the appeal filed by the
appellant by a non-speaking order. The dismissal was challenged on the ground of bias
as the disciplinary authority and the appellate authority were the same.
Doctrine of necessity was placed into service. The court holding that the doctrine of
necessity is not applicable said It is not in dispute that Shri Krishanswamy, the then
Chairman cum Managing Director of the company acted as disciplinary authority as
well as the appellate authority, when he presided over and participated in the
deliberation of the meeting of the board while deciding the appeal of the appellant.
Such dual function is not permissible on account of established rule against bias. In a
situation where such a dual function is discharged by one and the same authority,
unless permitted by an Act of legislation or statutory provision, the same would be
contrary to rule against bias.

The "doctrine of necessity" was pleaded on the ground that the regulation of the
company provides that the disciplinary authority that happens to be Chairman cum
Managing Director was required to preside over the meeting of the board. The court
referring to the regulation ofthe company held that the regulation does not so provide
and the board can be constituted excluding the Chairman-cum-Managing Director.
The "Doctrine of Necessity" is held not applicable.
 Conclusion
Doctrine of Necessity acts as an exception to „Nemo judex in causa sua‟. Bias would not
disqualify an officer from taking an action if no other person is competent to act in his
place. This exception is based on the doctrine which it would otherwise not
countenance on the touchstone of judicial propriety. The doctrine of necessity makes it
imperative for the authority to decide and considerations of judicial propriety must
yield. It can be invoked in cases of bias where there is no authority to decide the issue.
If the doctrine of necessity is not allowed full play in certain unavoidable situations, it
would impede the course of justice itself and the defaulting party would benefit from it.
If the choice is between either to allow a biased person to act or to stifle the action
altogether, the choice must fall in favour of the former as it is the only way to promote
decision-making. But it has also been made very clear by the Supreme Court that
Doctrine of Necessity cannot be invoked every now and then, as if that is done, it might
lead to absence of Rule of Law in the Society. Hence, Doctrine of Necessity should be
taken as „Doctrine of Absolute Necessity‟. Every kind of preference is not sufficient to
vitiate an administrative action. If the preference is rational and unaccompanied by
consideration of rational interest, pecuniary or otherwise, it would not vitiate the
decision. Similarly, there must be a real likelihood and not a mere suspicion of bias,
before the proceedings can be quashed on the ground of bias. It is also important to
notethat this rule is not confined to cases where judicial power strict sensu is
exercised. It is appropriately extended to all cases where an independent mind has to
be applied to arrive at afair and just decision between the rival claims of the parties.