Reasons Not Stated in an Order Can Be Considered in Limited Circumstances: Supreme Court

In a landmark ruling delivered on September 17, 2025, the Supreme Court carved out a narrow exception to the “speaking order” doctrine, reaffirming that while the validity of administrative orders should generally be assessed solely on the reasons expressly stated within them, courts may—in rare and limited situations—consider unstated grounds that are plainly evident from the record. A bench led by Justices Dipankar Datta and A.G. Masih set aside a direction of the Andhra Pradesh High Court that had compelled the State Bank of India (SBI) to reconsider a borrower’s One Time Settlement (OTS) proposal. The bank’s original rejection order failed to cite the borrower’s repeated defaults or the failure to deposit 5% of the dues upfront—a precondition stipulated by Clause 4(i) of the OTS 2020 Scheme—but these facts were incontrovertibly present in the records. Departing from conventional practice, the Supreme Court established a three-layer test permitting adjudication based on alternative grounds: (1) if the stated grounds are untenable; (2) the court may “trace” a valid reason from the record or factual narrative; and (3) provided the affected party receives notice and fair opportunity to respond. The judgment stresses that new grounds cannot be introduced extraneously or retroactively, protecting transparency and fairness in administrative review—a principle rooted in Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405. The Court clarified that where factual grounds are discernible but unstated, and the requirements of justice and fair procedure are met, orders may be upheld on such basis. In this specific case, though SBI’s rejection did not explicitly mention the lack of a 5% upfront payment, the record and OTS scheme made the deficiency obvious, and the borrower could not factually contest non-payment. The case title is “Assistant General Manager State Bank of India & Anr. vs. Tanya Energy Enterprises,” citation: 2025 LiveLaw (SC) 918. The decision not only reiterates fairness but also sets out procedural safeguards for future review of administrative orders.