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In Union of India & Ors. Vs. E.G. Nambudiri, as reported in (1991) 3 SCC 38, the Apex Court held that the competent authority has no licence to act arbitrarily. It must act in a fair and just manner. It is required to consider the questions raised and examine the same. The administrative authority does not have liberty to pass orders without there being any reasons for the same. Right to reasons is an indispensable part of a sound system of judicial review. Since under our Constitution an administrative decision is subject to judicial review if it affects the right of a citizen, it is desirable that reasons should be stated.
In the case between Union of India Vs. Mohan Lal Capoor & Ors., as reported in (1973) 2 SCC 836, it was held that 'reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable.'