Step 1: Understanding the Question:
The question asks to identify the landmark decision that settled the test for a "duty to act judicially" as the key distinction between a quasi-judicial authority and an administrative authority.
Step 2: Key Legal Principles and Approach:
Historically, courts held that the principles of natural justice (such as a fair hearing) applied only to judicial or quasi-judicial bodies, not to administrative bodies.
For a body to be quasi-judicial, it was argued that there must be a specific "duty to act judicially" superadded by the statute itself.
Step 3: Detailed Explanation:
• The Old Restrictive Approach: In cases like Nakkuda Ali (1951), the Privy Council held that a license commissioner was not acting quasi-judicially because the statute did not explicitly superadd a duty to act judicially.
• This created a major barrier to challenging arbitrary administrative decisions.
• The Ridge v. Baldwin Revolution: In the historic English House of Lords case of Ridge v. Baldwin (1964), this restrictive approach was discarded.
• Lord Reid analyzed classical authorities and concluded that the "duty to act judicially" is not something that needs to be superadded by a statute.
• Instead, the duty to act judicially is implied from the very nature of the power itself.
• If an administrative authority has the power to decide a matter that affects the rights, status, or livelihood of an individual, the duty to act judicially (and thus follow natural justice) is inherent in that function.
• This case broke down the rigid distinction between administrative and quasi-judicial acts, establishing that even purely administrative bodies must act fairly.
• Therefore, the test was finally settled in Ridge v. Baldwin, making Option (A) the correct choice.
Step 4: Final Answer:
The House of Lords settled the "duty to act judicially" test by implying it from the nature of the power in *Ridge v. Baldwin*, making Option (A) the correct answer.