The rules of natural justice were originally only two viz.:
1. Audi alteram partem i.e. the person(s) to be affected by an order of the authority should be heard before the order is passed, and
2. The rule against bias.
Subsequently, some more rules of natural justice are in the process of development e.g. that the administrative authority should give reasons for its decisions, particularly when the decisions affect the rights and liabilities of the citizens.
It must, however, be made clear that the rules of natural justice are flexible, and are not a straitjacket formula . In exceptional cases not only can they be modified but even excluded altogether . Natural justice is not an unruly horse. If fairness is shown, there can be no complaint of breach of natural justice .
As regards the rule audi alteram partem, up to 1964 the legal position in England was that in judicial and quasi-judicial proceedings opportunity of hearing had to be given, but it was not necessary to do so in administrative proceedings. This legal position changed in Ridge v. Baldwin in which the House of Lords held that opportunity of hearing had to be given even in administrative proceedings if the administrative order would affect the rights and liabilities of the citizens. This view of the House of Lords was followed by the Supreme Court in State of Orissa v. Dr. Binapani Dei and State of Maharashtra v. Jalgaon Municipal Council wherein it was held that administrative orders which involve civil consequences have to be passed consistently with the rules of natural justice.
The expression “civil consequences” means where rights and liabilities are affected. Thus, before blacklisting a person he must be given a hearing . It may be noted that even if the statute does not expressly require that opportunity of hearing must be given before passing an order which affects rights and liabilities, the courts have held that such opportunity of hearing must be given unless expressly excluded by the statute . Thus, natural justice is an implied requirement of administrative decisions which affects rights and liabilities.
It may be mentioned that a hearing need not always be an oral hearing. In certain circumstances, the Administrator can only issue a show-cause notice to the party likely to be affected and on his/her reply can pass the decision without giving a personal hearing to the parties. However, in certain circumstances where the party may be very seriously affected the courts have insisted that an oral hearing with opportunity of presenting witnesses and cross-examining the witnesses on the other side must be given.
Similarly, the principle that “no man should be a judge in his own cause” disqualifies an Administrator from giving a decision which affects the rights and liabilities, if he is biased. It may, however, be pointed out that in H.C. Narayanappa v. State of Mysore the Supreme Court observed that the Minister or officer invested with the power to hear objections to a scheme is acting in his official capacity and unless there is reliable evidence to show that he is actually biased, his decision will not be liable to be called in question merely because the objections to the government scheme are heard by the government itself or by its officers.
The requirement to give reasons in administrative decisions which affect rights and liabilities has been held to be mandatory by the Supreme Court in S.N. Mukherjee v. Union of India . This reduces the chances of arbitrariness on the part of the authority, as the reasons recorded by him are subject to judicial scrutiny by the higher courts or authorities.
Before concluding, it must also be mentioned that there are certain administrative matters which are inappropriate for judicial review. One of these is policy decisions of the government or of the executive authority which ordinarily should not be interfered with by the courts unless they are clearly violative of the statute or shockingly arbitrary . In the instant case the facts were that the Central Government had initially decided to locate the headquarters of South Western Railways at Bangalore. Later it was decided to locate it at Hubli, and this decision was challenged. The Supreme Court held that it was a policy decision and hence the Court cannot interfere, even if the decision was political .
Similarly, maintenance of law and order is an executive function, and the courts should not ordinarily interfere with the same .
Apart from that, practically every legal system recognizes certain subjects as inappropriate for judicial review e.g. foreign affairs, declaration of wars, etc.