Orissa High Court
Maa Biraja Self Help Group vs State Of Odisha on 13 June, 2025
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.15237 of 2025
In the matter of an Application under Articles 226 & 227 of
the Constitution of India, 1950
***
Maa Biraja Self Help Group
Represented by the Secretary
Smt. Mani Pani
aged about 45 years
Wife of Arabinda Pani
At: Kudapada, P.O.: Kudapada
P.S.: Burla, District: Sambalpur
PIN: 768025 ... Petitioner
-VERSUS-
1. State of Odisha, represented through
Commissioner-cum-Secretary,
Mission Shakti Department,
Lok Seva Bhawan, Sachivalaya Marg
Bhubaneswar - 751001.
2. Odisha State Civil Supplies Corporation,
represented through its Managing Director,
C/2, Nayapalli, Bhubaneswar - 751012.
3. The Collector-cum-District Magistrate, Sambalpur
At/P.O./District: Sambalpur - 768001
4. The Sub-Collector-cum-District Magistrate,
Sambalpur
At/P.O./District: Sambalpur - 768001
W.P.(C) No.15237 of 2025 Page 1 of 51
5. The District Social Welfare Officer,
Sambalpur, Hans Nagar, Sambalpur
Barhakuni, Odisha - 768001
6. The Chief Civil Supply Officer,
Hans Nagar, P.O./District: Sambalpur
Odisha - 768001 ... Opposite Parties.
Counsel appeared for the parties:
For the Petitioner : Mr. Subir Palit, Senior Advocate
along with
Mr. Amitabh Mishra and
Abhisek Kejriwal, Advocates
For the Opposite Parties : Mr. Bibekananda Nayak,
Additional Government Advocate
P R E S E N T:
HONOURABLE
MR. JUSTICE MURAHARI SRI RAMAN
Date of Hearing : 13.06.2025 :: Date of Judgment : 13.06.2025
J UDGMENT
Illegal, arbitrary, and whimsical action of Collector-cum-
District Magistrate, Sambalpur, vide order No.2074/CS,
dated 13.05.2025, debarring the petitioner from paddy
procurement operation KMS 2024-25 (Rabi Season) with
immediate effect, is under challenge in the instant writ
petition invoking provisions of Articles 226 and 227 of
W.P.(C) No.15237 of 2025 Page 2 of 51
the Constitution of India, wherein the following prayer(s)
has been made:
"It is therefore humbly prayed that this Hon‟ble Court may
graciously be pleased to declare that the order vide
No.2074 dated 13.05.2025 issued by the O.P. No.3 as at
Annexure-10 be quashed;
And may further be pleased to direct that the existing Self
Help Group members not be removed from their functional
roles and responsibilities, and be allowed to continue
their participation without disruption;
And may further be pleased to pass any other order(s) as
deemed fit and proper;
And for this act of kindness, the petitioners shall, as in
duty bound, ever pray."
Facts:
2. Shorn off unnecessary detailed narration of facts, as is
relevant for the present purpose are taken note of
hereunder.
2.1. It is submitted by the petitioner1 that it has been issued
with licence vide License No.125 dated 13.03.2023
under Section 4(6) of the Odisha Agricultural Produce
1 The petitioner is a Women Self Help Group registered in the Mission Shakti vide
its Registration No. 2401-001-602721 for empowerment of women and ensure
decentralized, community-based leadership to operate as Trader/Commission
Agent/Surveyor Broker/Weighman/measure in the Regulated Market
Committee Market yard.
W.P.(C) No.15237 of 2025 Page 3 of 51
Markets Act, 19562 read with Rule 60 of the Odisha
Agricultural Produce Markets Rules, 1958 by the Sub-
Collector, Sambalpur-cum-Chairman Regulated Market
Committee, Sambalpur to operate as trader/commission
agent/surveyor broker/weighman/measure in the
Regulated Market Yard, Sambalpur.
2.2. Sub-Divisional Selection Committee recommended eight
Women Self Help Groups including the petitioner on its
Meeting held on 21.10.2020 for involvement in KMS
(Kharif Marketing Season) 2020. Since then the
petitioner has been involved in the paddy procurement
for the Regulated Marketing Committee, Sambalpur.
2.3. A tripartite agreement among the petitioner, the District
Social Welfare Officer, Sambalpur (DSWO) and the
District Manager, Odisha State Civil Supplies
Corporation Limited, Sambalpur, was executed on
19.11.2024 with the object as specified in Clause (2) and
Clause (3) thereof, which are reproduced hereinbelow:
"Clause-2: Objective of the Contract:
As per Food and Procurement Policy for KMS 2024-25, the
Corporation has to undertake for procurement of paddy
from farmers at the PPC to be operated by selected
WSHGs as commission agent. The DSWO shall act as
2 An act to provide, for the better regulation of buying and selling of agricultural
produce and the establishment of markets for agricultural produce in the State
of Odisha.
W.P.(C) No.15237 of 2025 Page 4 of 51
Nodal Officer for procurement of FAQ/URS paddy through
WSHGs in the concerned districts.
Clause-3: Duration of Contract:
The contract shall come into force with effect from the date
of execution of this agreement and shall remain in force
till 30.09.2025 or till conciliation of paddy purchased and
delivered to millers and settlement of accounts with the
Corporation, whichever is later.
This agreement may be extended for further period as
may be mutually agreed by the parties on the same terms
and conditions or as per the direction of the Government."
2.4. The President of Maa Biraja Women‟s Self Help Group
(petitioner) has deposited amount towards license fees
for the year 2024-25 in respect of agricultural produce
being transported from 01.11.2024 to 31.10.2025 and
received a receipt from the authorized person of the
Market Committee.
2.5. The petitioner was allowed to procure paddy for KMS
2024-25 (Rabi Season) in respect of Dhankauda Block in
Sambalpur Division pursuant to decision taken in the
"Proceeding of the District Level Procurement
Committee" Meeting held on 29.04.2025.
2.6. In order to maintain smooth and hassle-free paddy
procurement operation during KMS 2024-25 (Rabi
Season), Mandi Nodal Officers (MNO) and Mandi
W.P.(C) No.15237 of 2025 Page 5 of 51
Supervising Officers (MSO) are appointed vide Order
No.1804/CS, dated 28.04.2025.
2.7. Vide Letter No.2061/CS, dated 10.05.2025, Collector,
Sambalpur has issued letter addressed to the CDM &
PHO, Sambalpur for making provision of the First Aid
Kit and the ORS Pouch at each Market Yard/Paddy
Purchase Centre of Samabalpur district during KMS
2024-25 (Rabi Season). The procurement period relating
to KMS 2024-25 scheduled to span from 01.10.2024 to
30.09.2025.
2.8. On the basis of a complaint received against the
petitioner by some villagers (Manoj Sahu and others), an
enquiry report was directed to be submitted by the
Collector-cum-District Magistrate, Sambalpur; in
pursuance of which joint enquiry report prepared by the
DRCS, Sambalpur and the CSO, Sambalpur was stated
to have been submitted.
2.9. As it appears from order dated 13.05.2025 action has
been taken by the Collector & District Magistrate,
Sambalpur based on complaint of Manoj Sahu and
others and joint enquiry report debarring the petitioner
from paddy procurement operation for ensuing KMS
2024-25 (Rabi Season).
2.10. Hence, this writ petition.
W.P.(C) No.15237 of 2025 Page 6 of 51
Hearing:
3. Since the procurement of paddy is on-going and involves
time-bound factor, the matter was directed to be listed
during vacation of this Court on 04.06.2025. Pursuant
to order of even date, counter affidavit being sworn to by
Sri Subodh Hota, Chief Civil Supplies Officer, Sambalpur
(opposite party No.6) has been filed on 10.06.2025,
serving copy thereof on Sri Amitabh Mishra, Advocate.
3.1. As short point whether principles of natural justice have
been complied with before taking decision to debar the
petitioner from paddy procurement falls for
consideration of this Court, on consent, the counsel for
respective parties advanced arguments on 10.06.2025.
After arguments are advanced by both sides, on the
request of Senior Counsel for the petitioner, the matter
stood posted today for further hearing. Accordingly final
hearing is conducted today.
3.2. Heard Sri Subir Palit, learned Senior Advocate being
assisted by Sri Amitabh Mishra and Sri Abhisek
Kejriwal, learned Advocates for the petitioner and Sri
Bibekananda Nayak, learned Additional Government
Advocate.
Arguments:
W.P.(C) No.15237 of 2025 Page 7 of 51
4. Sri Subir Palit, learned Senior Counsel appearing for the
petitioner advanced following submissions:
(i) The order dated 13.05.2025 is without authority
and jurisdiction of the Collector-cum-District
Magistrate, Sambalpur in view of explicit provisions
contained in the Odisha Agricultural Produce
Markets Act, 1956;
(ii) The order impugned dated 13.05.2025, vide
Annexure-10, is cryptic, bereft of reason and illegal;
and
(iii) Non-supply of enquiry report purported to have
been submitted pursuant to joint inspection
vitiates the decision taken vide order dated
13.05.2025.
(iv) Debarment without duly confronting the material
collected behind the back of the petitioner leads to
adverse civil consequences, as a result of which the
order impugned is untenable in the eye of law.
(v) Basic tenets of natural justice being not adhered to,
the petitioner is entitled for restoration of position
as if the order dated 13.05.2025 (Annexure-10) has
never been given effect to.
W.P.(C) No.15237 of 2025 Page 8 of 51
5. Sri Bibekananda Nayak, learned Additional Government
Advocate would submit that action has been taken on
the basis of complaint received from Manoj Sahu and
others by the Collector-cum-District Magistrate,
Sambalpur. Joint enquiry was conducted and a report
was submitted by the DRCS and the CSO, Sambalpur as
against the petitioner.
5.1. It is manifest from the joint enquiry report that:
(i) as against 169 numbers of forms discovered on
physical verification, 196 numbers of farmers (25
new farmers and 171 existing farmers) were
registered for Rabi 2024-25 as per the online
portal;
(ii) the petitioner maintained a receipt register without
page certification and maintained the same
unsystematically;
(iii) though the petitioner was allocated to procure
paddy from farmers relating to Kalamati Gram
Panchayat area, registration of some farmers of
Satupali Mouza, A. Katapali Mouza, Sansinhgari
Mouza, Basantpur Mouza have been made; and
(iv) on inspection, it could be ascertained that basic
infrastructure amenities like godown, toilet,
drinking water, weigh bridge, space for paddy
W.P.(C) No.15237 of 2025 Page 9 of 51
cleaning and paddy vehicle parking area etc. were
not made available.
(v) In addition thereto, there was violation of
Operational Guideline for KMS 2024-25
communicated vide Letter No.12908 dated
28.10.2024 particularly the petitioner having not
preserved system generated hard copy of all
registers/documents in bound book shape as
required under point No.9.2 of the said Guideline.
5.2. Sri Bibekananda Nayak, learned Additional Government
Advocate vehemently contended on merits that such
serious mismanagement being noticed during inspection
led to debarment of the petitioner from paddy
procurement operation. Therefore, he submitted that the
order dated 13.05.2025 cannot be faulted with.
6. Sri Subir Palit, learned Senior Counsel appearing for the
petitioner, after perusal of counter affidavit, refuting the
contentions of the Additional Government Advocate
urged that the petitioner has come up before this Court
on limited grievance on the points of jurisdiction of the
authority and the non-compliance of principles of
natural justice. He submitted that had the copy of joint
enquiry report been supplied to the petitioner, it would
have explained each point of allegation.
W.P.(C) No.15237 of 2025 Page 10 of 51
6.1. It is affirmed that the petitioner was unaware of contents
of the joint enquiry report which were never confronted
to it. Such enquiry report having been submitted to the
Collector behind his back, and the Collector having
acted upon such report and utilised the same to the
detriment of the petitioner to debar it from the paddy
procurement operation, the impugned order dated
13.05.2025 cannot be sustained in the eye of law.
6.2. Expanding his argument further Sri Subir Palit, learned
Senior Advocate referred to Order dated 10.03.2025
passed in W.P.(C) No.29405 of 2024 (Maa Asuragadian
Women Self-Help Group, Subarnapur) & batch to buttress
that the opposite parties should have acted fairly and
pragmatically. Before taking recourse to debarment of
the petitioner from procurement of paddy, adverse
material should have been put to its notice and called for
explanation.
6.3. It is, therefore, submitted by learned Senior Counsel
that from the contents of the enquiry report, which came
to its knowledge on receiving the counter affidavit, the
allegations could come to be noticed by the petitioner. It
is submitted that the terms and conditions as stipulated
in the tripartite agreement being not contravened at any
stage by the petitioner during the subsistence of such
agreement, the order dated 13.05.2025 could not have
W.P.(C) No.15237 of 2025 Page 11 of 51
been passed by the Collector-cum-District Magistrate,
Sambalpur by taking a unilateral decision on the basis
of the joint enquiry report; and that too in transgression
of his power conferred under Rule 61 of the Odisha
Agricultural Produce Markets Rules, 19583. The enquiry
being conducted on vague and frivolous allegations
levelled against the petitioner by one Sri Manoj Sahu
and others, the same could not trigger enquiry to form
the basis for debarment of the petitioner from
procurement of paddy in the midst of KMS-2024-25. He
further submitted that no reason emanates from order
dated 13.05.2025. Thus, any subsequent reason
assigned by way of counter affidavit would not sanctify
the impugned order dated 13.05.2025.
6.4. Sri Subir Palit, learned Senior Advocate laid emphasis
on the following oft-quoted principle laid down in Taylor
3 Rule 61 of the Odisha Agricultural Produce Markets Rules, 1958, stands thus:
"61. Powers of the Market Committee to suspend or cancel the licence granted
to traders and general commission agents.--
(1) The Market Committee may, by a resolution passed by a majority
consisting not less than two-thirds of its members cancel or suspend for a
fixed period, the licence granted to one trader or general commission agent
if he contravenes any of the conditions of his agreement or licence or of the
rules or bye-laws or who, in the opinion of the Market Committee, is not
solvent:
Provided that no order cancelling the licences or suspending the same for
a period of more than six months shall be passed without previous
approval of the Director.
(2) Any appeal against the decision of the Committee given under Sub-rule (1)
shall lie to such Officer as may be authorised by the Director in this behalf
and the decision of such officer in such appeal shall be final:
Provided that such appeal is made within thirty days of the decision of the
Market Committee and the appellant abides by the decisions of the Market
Committee from the date of such decision till the date of the orders passed
in appeal."
W.P.(C) No.15237 of 2025 Page 12 of 51
Vrs. Taylor, (1875) 1 Ch.D. 426, as approved and followed
till date, that if the rule requires something to be done in
a particular manner, it should be done either in the
same manner or not at all. The Collector-cum-District
Magistrate, Sambalpur by his action rendered the
licence granted by competent authority under the
Odisha Agricultural Produce Markets Act and rules
framed thereunder inoperative. Such a course is without
jurisdiction and authority conferred under the statute.
Therefore, he arduously submitted that the action taken
by the Collector-cum-District Magistrate cannot be
countenanced in law as lack of jurisdiction goes to the
root of the matter.
7. To counter such arguments, learned Additional
Government Advocate in reply submitted that the reason
being stated in the joint enquiry report needed no
further examination by the Collector. Having accepted
the enquiry report which was submitted upon
conducting verification in connection with the allegation
of Sri Manoj Sahu and others, the petitioner was
debarred from paddy procurement operation for KMS
2024-25.
7.1. He submitted that there was no requirement of
observing formality by affording rigmarole of natural
justice and hearing when the joint enquiry report is tell-
W.P.(C) No.15237 of 2025 Page 13 of 51
tale with respect to non-compliance of stipulation
contained in relevant guideline and covenant of
agreement.
7.2. Sri Bibekananda Nayak, learned Additional Government
Advocate would place reliance on The Secretary, A.P.
Social Welfare Residential Educational Institutions Vrs.
Sri Pindiga Sridhar, (2007) 4 SCR 145 to buttress his
argument that in the circumstances of the present case
there was no necessity to afford opportunity of hearing
by furnishing copy of enquiry report.
Analysis and discussions:
8. The facts are undisputed, save and except the contents
reflected in the joint enquiry report, as set out by the
petitioner after receipt of copy of counter affidavit. It is
fairly conceded by the counsel for the opposite parties
that copy of joint enquiry report submitted by the DRCS
and the CSO, Sambalpur was never brought to the
notice of the petitioner in order to afford an opportunity
to have its say. The reason for debarment from
procurement of paddy as put forth in the counter
affidavit could not improve the case of the opposite
parties inasmuch as the Office Order dated 13.05.2025
(Annexure-10) does not transpire such reason.
W.P.(C) No.15237 of 2025 Page 14 of 51
8.1. It is well-settled principle of law as laid down by the
Supreme Court in Mohinder Singh Gill and another Vrs.
The Chief Election Commissioner, New Delhi and others,
AIR 1978 SC 851. It has been held that:
„When a statutory functionary makes an order
based on certain grounds, its validity must be
judged by the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of
affidavit or otherwise. Otherwise an order bad in the
beginning may by the time it comes to Court on account of
a challenge, get validated by additional grounds later
brought out.‟
In Commissioner of Police, Bombay Vrs. Gordhandas
Bhanji, AIR 1952 SC 16, the Apex Court held as follows:
„Public orders publicly made, in exercise of a
statutory authority cannot be construed in the light
of explanations subsequently given by the officer
making the order of what he meant, or of what was
in his mind, or what he intended to do. Public orders
made by public authorities are meant to have public effect
and are intended to affect the acting and conduct of those
to whom they are addressed and must be construed
objectively with reference to the language used in the
order itself. Orders are not like old wine becoming better
as they grow older.‟
Similar view has also been taken in Bhikhubhai
Vithalbhai Patel and others Vrs. State of Gujarat and
another, (2008) 4 SCC 144 as well as in M/s. Shree
Ganesh Construction Vrs. State of Orissa, 2016 (II) OLR
237 = 2016 (II) ILR-CUT 237.
W.P.(C) No.15237 of 2025 Page 15 of 51
In the case of State of Punjab Vrs. Bandeep Singh, (2016)
1 SCC 724 the Apex Court held that the validity of
administrative orders/decisions/ executive
instructions/orders/circulars must be judged by
reasons stated in decision or order itself. Subsequent
explanations or reasons cannot be accepted to sustain
decision or order."
8.2. Under the aforesaid premise, the reason being not
depicted in the impugned Order dated 13.05.2025, it
cannot be held to be tenable.
8.3. It may be pertinent to refer to Swadeshi Cotton Mills Vrs.
Union of India, (1981) 1 SCC 664, wherein it has been
lucidly explained the meaning and the concept of
„natural justice‟. It is stated:
"26. Well then, what is "natural justice"? The phrase is
not capable of a static and precise definition. It
cannot be imprisoned in the straight-jacket of a cast-
iron formula. Historically, "natural justice" has been
used in a way "which implies the existence of moral
principles of self-evident and unarguable truth".
[Paul Jackson : Natural Justice, 2nd Edn., p 1] In
course of time, Judges nurtured in the traditions of
British jurisprudence, often invoked it in conjunction
with a reference to "equity and good conscience".
Legal experts of earlier generations did not draw
any distinction between "natural justice" and
"natural law". "Natural justice" was considered as
"that part of natural law which relates to the
administration of justice". Rules of natural justice
are not embodied rules. Being means to an end and
W.P.(C) No.15237 of 2025 Page 16 of 51
not an end in themselves, it is not possible to make
an exhaustive catalogue of such rules.
27. But two fundamental maxims of natural justice have
now become deeply and indelibly ingrained in the
common consciousness of mankind, as pre-
eminently necessary to ensure that the law is
applied impartially, objectively and fairly. Described
in the form of Latin tags these twin principles are:
(i) audi alteram partem and
(ii) nemo judex in re sua.
For the purpose of the question posed above, we are
primarily concerned with the first. This principle was
well-recognised even in the ancient world. Seneca,
the philosopher, is said to have referred in Medea
that it is unjust to reach a decision without a full
hearing. In Maneka Gandhi case, (1978) 1 SCC 405
= (1978) 2 SCR 272, Bhagwati, J. emphasised that
audi alteram partem is a highly effective rule
devised by the courts to ensure that a statutory
authority arrives at a just decision and it is
calculated to act as a healthy check on the abuse or
misuse of power. Hence its reach should not be
narrowed and its applicability circumscribed.
***
31. The rules of natural justice can operate only in areas
not covered by any law validly made. They can
supplement the law but cannot supplant it (per
Hedge, J. in A.K. Kraipak, (1975) 1 SCC 421 =
(1975) 3 SCR 619). If a statutory provision either
specifically or by inevitable implication excludes the
W.P.(C) No.15237 of 2025 Page 17 of 51
application of the rules of natural justice, then the
court cannot ignore the mandate of the legislature.
Whether or not the application of the principles of
natural justice in a given case has been excluded,
wholly or in part, in the exercise of statutory power,
depends upon the language and basic scheme of the
provision conferring the power, the nature of the
power, the purpose for which it is conferred and the
effect of the exercise of that power. (see Union of
India Vrs. Col. J.N. Sinha, (1969) 2 All ER 1207)
32. The maxim audi alteram partem has many facets.
Two of them are:
(a) notice of the case to be met; and
(b) opportunity to explain.
This rule is universally respected and duty to afford
a fair hearing in Lord Lore-burn‟s oft-quoted
language, is "a duty lying upon everyone who
decides something", in the exercise of legal power.
The rule cannot be sacrificed at the altar of
administrative convenience or celerity; for,
"convenience and justice"-- as Lord Atkin
felicitously put it-- "are often not on speaking terms
[General Medical Council Vrs. Spackman, 1943 AC
627, 638".
***
44. In short, the general principle -- as distinguished
from an absolute rule of uniform application --
seems to be that where a statute does not, in terms,
exclude this rule of prior hearing but contemplates a
post-decisional hearing amounting to a full review of
W.P.(C) No.15237 of 2025 Page 18 of 51
the original order on merits, then such a statute
would be construed as excluding the audi alteram
partem rule at the pre-decisional stage. Conversely,
if the statute conferring the power is silent with
regard to the giving of a pre-decisional hearing to the
person affected and the administrative decision
taken by the authority involves civil consequences of
a grave nature, and no full review or appeal on
merits against that decision is provided, courts will
be extremely reluctant to construe such a statute as
excluding the duty of affording even a minimal
hearing shorn of all its formal trappings and dilatory
features at the pre-decisional stage, unless, viewed
pragmatically, it would paralyse the administrative
progress or frustrate the need for utmost
promptitude. In short, this rule of fair play "must not
be jettisoned save in very exceptional circumstances
where compulsive necessity so demands". The court
must make every effort to salvage this cardinal rule
to the maximum extent possible, with situational
modifications. But, to recall the words of Bhagwati,
J., the core of it must, however, remain, namely, that
the person affected must have reasonable
opportunity of being heard and the hearing must be
a genuine hearing and not an empty public relations
exercise."
8.4. In the case of Canara Bank Vrs. Debasis Das, (2003) 4
SCC 557 = (2003) 2 SCR 968 the principles of natural
justice has illuminatingly been discussed in the
following manner: (SCC)
"12. Residual and crucial question that remains to be
adjudicated is whether principles of natural justice
W.P.(C) No.15237 of 2025 Page 19 of 51
have been violated; and if so, to what extent any
prejudice has been caused. It may be noted at this
juncture that in some cases it has been observed
that where grant of opportunity in terms of principles
of natural justice does not improve the situation,
"useless formality theory" can be pressed into
service.
13. Natural justice is another name for common-sense
justice. Rules of natural justice are not codified
canons. But they are principles ingrained into the
conscience of man. Natural justice is the
administration of justice in a common-sense liberal
way. Justice is based substantially on natural
ideals and human values. The administration of
justice is to be freed from the narrow and restricted
considerations which are usually associated with a
formulated law involving linguistic technicalities and
grammatical niceties. It is the substance of justice
which has to determine its form.
14. The expressions "natural justice" and "legal justice"
do not present a watertight classification. It is the
substance of justice which is to be secured by both,
and whenever legal justice fails to achieve this
solemn purpose, natural justice is called in aid of
legal justice. Natural justice relieves legal justice
from unnecessary technicality, grammatical
pedantry or logical prevarication. It supplies the
omissions of a formulated law. As Lord Buckmaster
said, no form or procedure should ever be permitted
to exclude the presentation of a litigant's defence.
15. The adherence to principles of natural justice as
recognized by all civilized States is of supreme
W.P.(C) No.15237 of 2025 Page 20 of 51
importance when a quasi-judicial body embarks on
determining disputes between the parties, or any
administrative action involving civil consequences is
in issue. These principles are well settled. The first
and foremost principle is what is commonly known
as audi alteram partem rule. It says that no one
should be condemned unheard. Notice is the first
limb of this principle. It must be precise and
unambiguous. It should apprise the party
determinatively of the case he has to meet. Time
given for the purpose should be adequate so as to
enable him to make his representation. In the
absence of a notice of the kind and such reasonable
opportunity, the order passed becomes wholly
vitiated. Thus, it is but essential that a party should
be put on notice of the case before any adverse order
is passed against him. This is one of the most
important principles of natural justice. It is after all
an approved rule of fair play. The concept has
gained significance and shades with time. When the
historic document was made at Runnymede in 1215,
the first statutory recognition of this principle found
its way into the "Magna Carta". The classic
exposition of Sir Edward Coke of natural justice
requires to "vocate, interrogate and adjudicate". In
the celebrated case of Cooper Vrs. Wandsworth
Board of Works, (1863) 143 ER 414 = 14 CBNS 180
= (1861-73) All ER Rep Ext 1554 the principle was
thus stated : (ER p. 420)
„[E]ven God himself did not pass sentence upon
Adam before he was called upon to make his
defence. „Adam‟ (says God), „where art thou? Hast
W.P.(C) No.15237 of 2025 Page 21 of 51
thou not eaten of the tree whereof, I commanded
thee that thou shouldest not eat?‟ ***‟
Since then the principle has been chiselled, honed
and refined, enriching its content. Judicial treatment
has added light and luminosity to the concept, like
polishing of a diamond.
16. Principles of natural justice are those rules which
have been laid down by the courts as being the
minimum protection of the rights of the individual
against the arbitrary procedure that may be adopted
by a judicial, quasi-judicial and administrative
authority while making an order affecting those
rights. These rules are intended to prevent such
authority from doing injustice.
17. What is meant by the term "principles of natural
justice" is not easy to determine. Lord Summer (then
Hamilton, L.J.) in R. Vrs. Local Govt. Board, (1914) 1
KB 160 = 83 LJKB 86 (KB at p. 199) described the
phrase as sadly lacking in precision. In General
Council of Medical Education & Registration of U.K.
Vrs. Spackman, 1943 AC 627 = (1943) 2 All ER 337
= 112 LJKB 529 (HL) Lord Wright observed that it
was not desirable to attempt "to force it into any
Procrustean bed" and mentioned that one essential
requirement was that the Tribunal should be
impartial and have no personal interest in the
controversy, and further that it should give "a full
and fair opportunity" to every party of being heard.
18. Lord Wright referred to the leading cases on the
subject. The most important of them is Board of
Education Vrs. Rice, 1911 AC 179 = 80 LJKB 796 =
W.P.(C) No.15237 of 2025 Page 22 of 51
(1911-13) All ER Rep 36 (HL) where Lord Loreburn,
L.C. observed as follows : (All ER p. 38 C-F)
„Comparatively recent statutes have extended, if
they have not originated, the practice of imposing
upon departments or officers of State the duty of
deciding or determining questions of various kinds.
It will, I suppose, usually be of an administrative
kind; but sometimes it will involve matter of law as
well as matter of fact, or even depend upon matter of
law alone. In such cases, the Board of Education
will have to ascertain the law and also to ascertain
the facts. I need not add that in doing either they
must act in good faith and listen fairly to both sides,
for that is a duty lying upon everyone who decides
anything. But I do not think they are bound to treat
such a question as though it were a trial. *** The
Board is in the nature of the arbitral tribunal, and a
court of law has no jurisdiction to hear appeals from
their determination, either upon law or upon fact.
But if the court is satisfied either that the Board
have not acted judicially in the way which I have
described, or have not determined the question
which they are required by the Act to determine,
then there is a remedy by mandamus and certiorari.‟
Lord Wright also emphasized from the same decision
the observation of the Lord Chancellor that "the
Board can obtain information in any way they think
best, always giving a fair opportunity to those who
are parties to the controversy for correcting or
contradicting any relevant statement prejudicial to
their view". To the same effect are the observations
of Earl of Selbourne, L.O. in Spackman Vrs.
Plumstead District Board of Works, (1885) 10 AC
W.P.(C) No.15237 of 2025 Page 23 of 51
229 = 54 LJMC 81 = 53 LT 151 where the learned
and noble Lord Chancellor observed as follows:
„No doubt, in the absence of special provisions as to
how the person who is to decide is to proceed, law
will imply no more than that the substantial
requirements of justice shall not be violated. He is
not a judge in the proper sense of the word; but he
must give the parties an opportunity of being heard
before him and stating their case and their view. He
must give notice when he will proceed with the
matter and he must act honestly and impartially and
not under the dictation of some other person or
persons to whom the authority is not given by law.
There must be no malversation of any kind. There
would be no decision within the meaning of the
statute if there were anything of that sort done
contrary to the essence of justice.‟
Lord Selbourne also added that the essence of
justice consisted in requiring that all parties should
have an opportunity of submitting to the person by
whose decision they are to be bound, such
considerations as in their judgment ought to be
brought before him. All these cases lay down the
very important rule of natural justice contained in
the oft-quoted phrase "justice should not only be
done, but should be seen to be done".
19. Concept of natural justice has undergone a great
deal of change in recent years. Rules of natural
justice are not rules embodied always expressly in a
statute or in rules framed thereunder. They may be
implied from the nature of the duty to be performed
under a statute. What particular rule of natural
W.P.(C) No.15237 of 2025 Page 24 of 51
justice should be implied and what its context
should be in a given case must depend to a great
extent on the facts and circumstances of that case,
the framework of the statute under which the
enquiry is held. The old distinction between a
judicial act and an administrative act has withered
away. Even an administrative order which involves
civil consequences must be consistent with the rules
of natural justice. The expression "civil
consequences" encompasses infraction of not merely
property or personal rights but of civil liberties,
material deprivations and non-pecuniary damages.
In its wide umbrella comes everything that affects a
citizen in his civil life.
20. Natural justice has been variously defined by
different Judges. A few instances will suffice. In
Drew Vrs. Drew and Lebura, (1855) 2 Macq 1 = 25
LTOS 282 (HL) (Macq at p. 8), Lord Cranworth
defined it as "universal justice". In James Dunber
Smith Vrs. Her Majesty the Queen, (1877-78) 3 AC
614 (PC) (AC at p. 623) Sir Robort P. Collier,
speaking for the Judicial Committee of the Privy
Council, used the phrase "the requirements of
substantial justice", while in Arthur John Spackman
Vrs. Plumstead District Board of Works, (1885) 10
AC 229 = 54 LJMC 81 = 53 LT 151 (AC at p. 240),
the Earl of Selbourne, S.C. preferred the phrase "the
substantial requirement of justice". In Vionet Vrs.
Barrett, (1885) 55 LJRD 39 (LJRD at p. 41), Lord
Esher, M.R. defined natural justice as "the natural
sense of what is right and wrong". While, however,
deciding Hookings Vrs. Smethwick Local Board of
Health, (1890) 24 QBD 712 Lord Esher, M.R. instead
W.P.(C) No.15237 of 2025 Page 25 of 51
of using the definition given earlier by him in Vionet
case, (1885) 55 LJRD 39 chose to define natural
justice as "fundamental justice". In Ridge Vrs.
Baldwin, (1963) 1 QB 539 = (1962) 1 All ER 834 =
(1962) 2 WLR 716 (CA) (QB at p. 578), Harman, L.J.,
in the Court of Appeal countered natural justice with
"fair play in action", a phrase favoured by
Bhagwati, J. in Maneka Gandhi Vrs. Union of India,
(1978) 1 SCC 248 = (1978) 2 SCR 621. In H.K. (An
Infant), Re (1967) 2 QB 617 = (1967) 1 All ER 226 =
(1967) 2 WLR 962 (QB at p. 630), Lord Parker, C.J.
preferred to describe natural justice as "a duty to act
fairly". In Fairmount Investments Ltd. Vrs. Secy. of
State for Environment, (1976) 1 WLR 1255 = (1976)
2 All ER 865 (HL) Lord Russell of Killowen somewhat
picturesquely described natural justice as "a fair
crack of the whip" while Geoffrey Lane, L.J. in R.
Vrs. Secy. of State for Home Affairs, ex p Hosenball,
(1977) 1 WLR 766 = (1977) 3 All ER 452 (CA)
preferred the homely phrase "common fairness".
21. How then have the principles of natural justice been
interpreted in the courts and within what limits are
they to be confined? Over the years by a process of
judicial interpretation two rules have been evolved
as representing the principles of natural justice in
judicial process, including therein quasi-judicial and
administrative process. They constitute the basic
elements of a fair hearing, having their roots in the
innate sense of man for fair play and justice which
is not the preserve of any particular race or country
but is shared in common by all men. The first rule is
"nemo judex in causa sua" or "nemo debet esse
judex in propria causa sua" as stated in Earl of
Derby‟s case, (1605) 12 Co Rep 114 = 77 ER 1390
that is, "no man shall be a judge in his own cause".
Coke used the form "aliquis non debet esse judex in
propria causa, quia non potest esse judex et pars"
(Co. Litt. 1418), that is, "no man ought to be a judge
in his own case, because he cannot act as judge and
at the same time be a party". The form "nemo potest
esse simul actor et judex", that is, "no one can be at
once suitor and judge" is also at times used. The
second rule is "audi alteram partem", that is, "hear
the other side". At times and particularly in
continental countries, the form "audietur et altera
pars" is used, meaning very much the same thing. A
corollary has been deduced from the above two rules
and particularly the audi alteram partem rule,
namely "qui aliquid statuerit, parte inaudita altera
acquum licet dixerit, haud acquum fecerit" that is,
"he who shall decide anything without the
other side having been heard, although he may
have said what is right, will not have been
what is right" [see Boswel‟s case, (1605) 6 Co Rep
48b = 77 ER 326 (Co Rep at p. 52-a) or in other
words, as it is now expressed, "justice should not
only be done but should manifestly be seen to be
done". Whenever an order is struck down as invalid
being in violation of principles of natural justice,
there is no final decision of the case and fresh
proceedings are left upon (sic. open). All that is done
is to vacate the order assailed by virtue of its
inherent defect, but the proceedings are not
terminated.
22. What is known as "useless formality theory" has
received consideration of this Court in M.C. Mehta
Vrs. Union of India, (1999) 6 SCC 237. It was
observed as under : (SCC pp. 245-47, paras 22-23)
„22. Before we go into the final aspects of this
contention, we would like to state that cases
relating to breach of natural justice do also
occur where all facts are not admitted or are
not all beyond dispute. In the context of those
cases there is a considerable case-law and
literature as to whether relief can be refused
even if the court thinks that the case of the
applicant is not one of „real substance‟ or that
there is no substantial possibility of his
success or that the result will not be different,
even if natural justice is followed see Malloch
Vrs. Aberdeen Corpn., (1971) 2 All ER 1278 =
(1971) 1 WLR 1578 (HL) (per Lord Reid and
Lord Wilberforce), Glynn Vrs. Keele University,
(1971) 2 All ER 89 = (1971) 1 WLR 487,
Cinnamond Vrs. British Airports Authority,
(1980) 2 All ER 368 = (1980) 1 WLR 582 (CA)
and other cases where such a view has been
held. The latest addition to this view is R. Vrs.
Ealing Magistrates‟ Court, ex p Fannaran,
(1996) 8 Admn LR 351 (Admn LR at p. 358)
[see de Smith, Suppl. p. 89 (1998)] where
Straughton, L.J. held that there must be
„demonstrable beyond doubt‟ that the result
would have been different. Lord Woolf in Lloyd
Vrs. McMahon, (1987) 1 All ER 1118 = 1987 AC
625 = (1987) 2 WLR 821 (CA) has also not
disfavoured refusal of discretion in certain
cases of breach of natural justice. The New
Zealand Court in McCarthy Vrs. Grant, 1959
NZLR 1014 however goes halfway when it
says that (as in the case of bias), it is sufficient
for the applicant to show that there is „real
likelihood -- not certainty -- of prejudice‟. On
the other hand, Garner‟s Administrative Law
(8th Edn., 1996, pp. 271-72) says that slight
proof that the result would have been different
is sufficient. On the other side of the argument,
we have apart from Ridge Vrs. Baldwin, 1964
AC 40 = (1963) 2 All ER 66 = (1963) 2 WLR 935
(HL), Megarry, J. in John Vrs. Rees, (1969) 2 All
ER 274 = 1970 Ch 345 = (1969) 2 WLR 1294
stating that there are always „open and shut
cases‟ and no absolute rule of proof of
prejudice can be laid down. Merits are not for
the court but for the authority to consider.
Ackner, J. has said that the „useless formality
theory‟ is a dangerous one and, however
inconvenient, natural justice must be followed.
His Lordship observed that „convenience and
justice are often not on speaking terms‟. More
recently, Lord Bingham has deprecated the
„useless formality theory‟ in R. Vrs. Chief
Constable of the Thames Valley Police Forces,
ex p Cotton, 1990 IRLR 344 by giving six
reasons. (See also his article „Should Public
Law Remedies be Discretionary?‟ 1991 PL, p.
64.) A detailed and emphatic criticism of the
„useless formality theory‟ has been made much
earlier in „Natural Justice, Substance or
Shadow‟ by Prof. D.H. Clark of Canada (see
1975 PL, pp. 27-63) contending that Malloch,
(1971) 2 All ER 1278 = (1971) 1 WLR 1578 (HL)
and Glynn, (1971) 2 All ER 89 = (1971) 1 WLR
487 were wrongly decided. Foulkes
(Administrative Law, 8th Edn., 1996, p. 323),
Craig (Administrative Law, 3rd Edn., p. 596)
and others say that the court cannot prejudge
what is to be decided by the decision-making
authority. de Smith (5th Edn., 1994, paras
10.031 to 10.036) says courts have not yet
committed themselves to any one view though
discretion is always with the court. Wade
(Administrative Law, 5th Edn., 1994, pp. 526-
30) says that while futile writs may not be
issued, a distinction has to be made according
to the nature of the decision. Thus, in relation
to cases other than those relating to admitted
or indisputable facts, there is a considerable
divergence of opinion whether the applicant
can be compelled to prove that the outcome will
be in his favour or he has to prove a case of
substance or if he can prove a „real likelihood‟
of success or if he is entitled to relief even if
there is some remote chance of success. We
may, however, point out that even in cases
where the facts are not all admitted or beyond
dispute, there is a considerable unanimity that
the courts can, in exercise of their „discretion‟,
refuse certiorari, prohibition, mandamus or
injunction even though natural justice is not
followed. We may also state that there is yet
another line of cases as in State Bank of
Patiala Vrs. S.K. Sharma, (1996) 3 SCC 364,
Rajendra Singh Vrs. State of M.P., (1996) 5
SCC 460 that even in relation to statutory
provisions requiring notice, a distinction is to be
made between cases where the provision is
intended for individual benefit and where a
provision is intended to protect public interest.
In the former case, it can be waived while in
the case of the latter, it cannot be waived.
23. We do not propose to express any opinion on
the correctness or otherwise of the „useless
formality‟ theory and leave the matter for
decision in an appropriate case, inasmuch as
in the case before us, „admitted and
indisputable‟ facts show that grant of a writ
will be in vain as pointed out by Chinnappa
Reddy, J.‟
23. As was observed by this Court we need not go into
"useless formality theory" in detail; in view of the
fact that no prejudice has been shown. As is rightly
pointed out by learned counsel for the appellants,
unless failure of justice is occasioned or that it
would not be in public interest to dismiss a petition
on the fact situation of a case, this Court may refuse
to exercise the said jurisdiction (see Gadde
Venkateswara Rao Vrs. Govt. of A.P., AIR 1966 SC
828). It is to be noted that legal formulations cannot
be divorced from the fact situation of the case.
Personal hearing was granted by the Appellate
Authority, though not statutorily prescribed. In a
given case post-decisional hearing can obliterate the
procedural deficiency of a pre-decisional hearing.
(See Charan Lal Sahu Vrs. Union of India, (1990) 1
SCC 613 = AIR 1990 SC 1480.)
24. Additionally, there was no material placed by the
employee to show as to how he has been prejudiced.
Though in all cases the post-decisional hearing
cannot be a substitute for pre-decisional hearing, in
the case at hand the position is different. The
position was illuminatingly stated by this Court in
Managing Director, ECIL Vrs. B. Karunakar, (1993) 4
SCC 727 which reads as follows:
„31. Hence, in all cases where the enquiry officer's
report is not furnished to the delinquent
employee in the disciplinary proceedings, the
courts and tribunals should cause the copy of
the report to be furnished to the aggrieved
employee if he has not already secured it
before coming to the court/tribunal and give
the employee an opportunity to show how his
or her case was prejudiced because of the non-
supply of the report. If after hearing the parties,
the court/tribunal comes to the conclusion that
the non-supply of the report would have made
no difference to the ultimate findings and the
punishment given, the court/tribunal should
not interfere with the order of punishment. The
court/tribunal should not mechanically set
aside the order of punishment on the ground
that the report was not furnished as is
regrettably being done at present. The courts
should avoid resorting to short cuts. Since it is
the courts/tribunals which will apply their
judicial mind to the question and give their
reasons for setting aside or not setting aside
the order of punishment, (and not any internal
appellate or revisional authority), there would
be neither a breach of the principles of natural
justice nor a denial of the reasonable
opportunity. It is only if the court/tribunal finds
that the furnishing of the report would have
made a difference to the result in the case that
it should set aside the order of punishment.
Where after following the above procedure, the
court/tribunal sets aside the order of
punishment, the proper relief that should be
granted is to direct reinstatement of the
employee with liberty to the authority/
management to proceed with the inquiry, by
placing the employee under suspension and
continuing the inquiry from the state of
furnishing him with the report. The question
whether the employee would be entitled to the
back wages and other benefits from the date of
his dismissal to the date of his reinstatement if
ultimately ordered, should invariably be left to
be decided by the authority concerned
according to law, after the culmination of the
proceedings and depending on the final
outcome. If the employee succeeds in the fresh
inquiry and is directed to be reinstated, the
authority should be at liberty to decide
according to law how it will treat the period
from the date of dismissal till the reinstatement
and to what benefits, if any and the extent of
the benefits, he will be entitled. The
reinstatement made as a result of the setting
aside of the inquiry for failure to furnish the
report, should be treated as a reinstatement for
the purpose of holding the fresh inquiry from
the stage of furnishing the report and no more,
where such fresh inquiry is held. That will also
be the correct position in law.‟
***"
8.5. This Court feels persuaded to reproduce the observation
of a Division Bench of this Court made in the case of
Sponge Udyot Pvt. Ltd. Vrs. The Asst. Commissioner of
Sales Tax, Rourkela-II Circle, Rourkela, 2010 SCC OnLine
Ori 68:
"5. Admittedly before issuance of the order of
suspension, the petitioner had not been served with
any notice to show cause. Admittedly there is no
provision in the Act or the Rules for service of a
notice to show cause before an order of suspension
is passed. Under these circumstances, the Court is
called upon to decide as to whether a notice in the
present case is required to be served on the
petitioner to show cause before the order of
suspension was passed or not. In the case of M/s.
Ramkumar Jaigopal Vrs. Assistant Commissioner of
Sales Tax, Sambalpur, 2007 (I) OLR 534 the
challenge was in relation to cancellation of
registration certificate. The petitioner therein was a
registered dealer under the Sales Tax authorities for
more than 58 years and without giving an
opportunity of hearing, the registration certificate
was cancelled. The Court not only dealt with Section
31 of the Act dealing with cancellation of certificate
of registration but also Section 30 of the Act which
dealing with suspension of registration certificate. In
paragraph-8 of the judgment relying on an earlier
decision of the Hon‟ble Supreme Court in the case of
Smt. Maneka Gandhi Vrs. Union of India and
another, reported in AIR 1978 SC 597, the Court
made the following observation:
„***
It must be kept in mind that the power of
suspension/cancellation of registration certificate of
a dealer, clearly imposes civil consequence and in
this respect law is well settled in the case of Smt.
Maneka Gandhi Vrs. Union of India and another
reported in AIR 1978 SC 597 wherein, the Apex
Court has held that the rule of natural justice is
embodied in every Statute and even where there is
no specific provision for the same and when an
administrative action involves civil consequence, the
doctrine of natural justice must be held to be
applicable.‟
6. As is evident from reading of the judgment though
the case related to cancellation of registration
certificate, the Court not only considered the
question of cancellation of registration certificate but
also suspension thereof and came to hold that the
power of suspension/cancellation of registration
certificate of a dealer clearly imposes civil
consequence and therefore, even where there is no
specific provision to follow the principles of natural
justice, when an administrative action involves civil
consequence, the doctrine of natural justice must be
held to be applicable.
In the case of Sidhartha Engineering Pvt. Ltd. Vrs.
Assistant Commissioner of Sales Tax and another,
(1999) 115 Sales Tax Cases 478 in paragraph-8 of
the judgment, the Court held that natural justice is
an inseparable ingredient of fairness and
reasonableness. Observance of the principles is
the pragmatic requirement of fair play in
action. The rules of natural justice operate as
implied mandatory procedural requirement
and non-observance whereof invalidates the
action.
Reference may also be made to some other decisions
in this connection. In the case of Sahara India (Firm)
Vrs. Commissioner of Income-Tax and another,
reported in (2008) 300 ITR 403 (SC) referring to large
number of earlier decisions including the case of
Maneka Gandhi (Mrs.) Vrs. Union of India (supra),
the Hon‟ble Supreme Court came to a conclusion that
even an administrative order or decision in matters
involving civil consequences has to be made
consistently with the rules of natural justice. The
concept of natural justice is invariably read into
administrative actions involving civil consequences,
unless the statute conferring the power excludes its
application by express language. A similar view
was expressed by this Court in the case of M/s. Iron
Exchange India Ltd. Vrs. State of Orissa and others,
reported in 1995 (I) OLR 402. The Court held in the
aforesaid decision that principles of natural
justice must be read into unoccupied
interstices of the statute unless there is a clear
mandate to the contrary. Such power is
inherent in every Tribunal, judicial or quasi-
judicial character and the purpose is to avoid
miscarriage of justice. In the case of Basanta
Kumar Sahoo Vrs. The State of Orissa and others,
reported in 1990 (II) OLR 408 while dealing with the
case under the Urban Land (Ceiling and Regulation)
Act, 1976, the Court held that where valuable
right is sought to be taken away, an
opportunity of hearing though not specifically
provided in the Act, is desirable to be given. In
the case of Kanak Cement Pvt. Ltd. Vrs. Sales Tax
Officer, Assessment Unit, Rajgangpur, reported in
(1997) 105 Sales Tax Cases 112, the Court observed
that it is a fundamental requirement of the
principles of natural justice that if any person
is likely to be affected by the use of any
material collected by the Revenue, those are to
be brought to his notice, and disclosed to him.
The requirement of natural justice is to
disclose by way of confrontation the materials
collected and proposed to be used against a
dealer.
Admitted in the Act and the Rules, though
there is no provision for affording an
opportunity of hearing before an order of
suspension is passed, the said principle of
natural justice has also not been expressly
excluded.
7. On reading of above judgments, it is clear that even
in respect of suspension of registration certificate,
civil consequence follows and therefore, observance
of principle of natural justice is a necessity. We are,
therefore, of the view that even though the statute is
silent about issuance of a notice to show cause prior
to passing of an order of suspension under Section
30 of the Act, when such order of suspension results
in civil consequences, the principles of natural justice
should be followed. We are, therefore, of the view
that the order of suspension of registration certificate
is liable to be quashed even though it is open for the
petitioner under the Act to seek for restoration of the
same."
8.6. The Essential feature of the principles of natural justice
as established by exposition of law by way of different
pronouncements is that the administrative officer and
the quasi judicial authority are required to assign reason
and adhere to principles of natural justice, one of the
facets of which is audi alteram partem.
8.7. At this stage, it is also felt expedient to refer to the
following observation of the Hon‟ble Supreme Court, in
the matter of Steel Authority of India Limited Vrs. Sales
Tax Officer, (2008) 10 SCR 655 = 2008 INSC 799:
"12. A bare reading of the order shows complete non-
application of mind. As rightly pointed out by
learned counsel for the appellant, this is not the way
a statutory appeal is to be disposed of. Various
important questions of law were raised.
Unfortunately, even they were not dealt by the first
appellate authority.
13. Reason is the heartbeat of every conclusion. It
introduces clarity in an order and without the same
it becomes lifeless. [See Raj Kishore Jha Vrs. State of
Bihar, (2003) 11 SCC 519].
14. Even in respect of administrative orders Lord
Denning, M.R. in Breen Vrs. Amalgamated Engg.
Union, (1971) 1 All ER 1148, observed:
„The giving of reasons is one of the fundamentals of
good administration.‟
In Alexander Machinery (Dudley) Ltd. Vrs. Crabtree
1974 ICR 120 (NIRC) it was observed:
"Failure to give reasons amounts to denial of
justice." "Reasons are live links between the
mind of the decision-taker to the controversy in
question and the decision or conclusion arrived
at." Reasons substitute subjectivity by
objectivity. The emphasis on recording reasons is
that if the decision reveals the "inscrutable face of
the sphinx", it can, by its silence, render it virtually
impossible for the courts to perform their appellate
function or exercise the power of judicial review in
adjudging the validity of the decision. Right to
reason is an indispensable part of a sound judicial
system; reasons at least sufficient to indicate an
application of mind to the matter before court.
Another rationale is that the affected party can know
why the decision has gone against him. One of the
salutary requirements of natural justice is spelling
out reasons for the order made; in other words, a
speaking-out. The "inscrutable face of the
sphinx" is ordinarily incongruous with a
judicial or quasi judicial performance."
8.8. This Court, without entering into any factual aspects
with respect to merits of the matter on a limited point of
non-confrontation of adverse material contained in the
joint enquiry report utilised against the petitioner to its
detriment, is inclined to hold that such untested
material could not form the basis to debar the petitioner
from procurement of paddy operation. The purported
action of the Collector having bearing on civil
consequences, the order impugned is liable to be set
aside.
8.9. It may be apposite to have reference to Blue Dreamz
Advertising Pvt. Ltd. & Anr. Vrs. Kolkata Municipal
Corporation, (2024) 8 SCR 189 = 2024 INSC 589, wherein
questions fell for consideration were as follows:
"The following questions arise for consideration:
a. Whether in the facts and circumstances of the case,
the order of the Corporation dated 02.03.2016,
debarring the appellant for a period of five years
is valid and justified in the eye of the law?
b. If so, what reliefs is the appellant entitled to?"
The Hon‟ble Supreme Court came to hold that,
"22. Blacklisting has always been viewed by this Court
as a drastic remedy and the orders passed have
been subjected to rigorous scrutiny. In Erusian
Equipment & Chemicals Ltd. Vrs. State of West
Bengal & Anr., (1975) 1 SCC 70, this Court observed
that
„20. Blacklisting has the effect of preventing a
person from the privilege and advantage of
entering into lawful relationship with the
Government for purposes of gains. The fact that
a disability is created by the order of
blacklisting indicates that the relevant authority
is to have an objective satisfaction. ***‟
23. In B.S.N. Joshi & Sons Ltd. Vrs. Nair Coal Services
Ltd. & Ors. (2006) Supp.8 SCR 11 = (2006) 11 SCC
548, this Court held that
„41. *** When a contractor is blacklisted by a
department he is debarred from obtaining
a contract, but in terms of the notice
inviting tender when a tenderer is
declared to be a defaulter, he may not get
any contract at all. It may have to wind up
its business. The same would, thus, have a
disastrous effect on him. Whether a person
defaults in making payment or not would
depend upon the context in which the
allegations are made as also the relevant
statute operating in the field. When a demand
is made, if the person concerned raises a bona
fide dispute in regard to the claim, so long as
the dispute is not resolved, he may not be
declared to be defaulter.‟
24. This Court in Kulja Industries Ltd. Vrs. Chief General
Manager Western Telecom Project BSNL & Ors.,
(2013) 14 SCR 430 = (2014) 14 SCC 731 after setting
out the legal position governing blacklisting/
debarment in USA and UK held that:
„25. Suffice it to say that "debarment" is recognised
and often used as an effective method for
disciplining deviant suppliers/contractors who
may have committed acts of omission and
commission or frauds including
misrepresentations, falsification of records and
other breaches of the regulations under which
such contracts were allotted. What is notable is
that the "debarment" is never permanent and
the period of debarment would invariably
depend upon the nature of the offence
committed by the erring contractor.
26. In the case at hand according to the respondent
BSNL, the appellant had fraudulently
withdrawn a huge amount of money which was
not due to it in collusion and conspiracy with
the officials of the respondent Corporation.
Even so permanent debarment from future
contracts for all times to come may sound too
harsh and heavy a punishment to be
considered reasonable especially when (a) the
appellant is supplying bulk of its manufactured
products to the respondent BSNL, and (b) the
excess amount received by it has already been
paid back.‟
25. What is significant is that while setting out the
guidelines prescribed in USA, the Court noticed that
comprehensive guidelines for debarment were issued
there for protecting public interest from those
contractors and recipients who are non-responsible,
lack business integrity or engage in dishonest or
illegal conduct or are otherwise unable to perform
satisfactorily. The illustrative cases set out also
demonstrate that debarment as a remedy is to be
invoked in cases where there is harm or potential
harm for public interest particularly in cases where
the person‟s conduct has demonstrated that
debarment as a penalty alone will protect public
interest and deter the person from repeating his
actions which have a tendency to put public interest
in jeopardy. In fact, it is common knowledge that in
notice inviting tenders, any person blacklisted is
rendered ineligible. Hence, blacklisting will not only
debar the person concerned from dealing with the
concerned employer, but because of the
disqualification, their dealings with other entities
also is proscribed. Even in the terms and conditions
of tender in the present case, one of the conditions of
eligibility is that the agency should not be blacklisted
from anywhere.
26. In other words, where the case is of an ordinary
breach of contract and the explanation offered by the
person concerned raises a bona fide dispute,
blacklisting/ debarment as a penalty ought not to be
resorted to. Debarring a person albeit for a
certain number of years tantamounts to civil
death inasmuch as the said person is
commercially ostracized resulting in serious
consequences for the person and those who are
employed by him.
27. Too readily invoking the debarment for ordinary
cases of breach of contract where there is a bona
fide dispute, is not permissible. Each case, no doubt,
would turn on the facts and circumstances thereto.
***
36. The Division Bench has observed that blacklisting is
a business decision by which the party affected by
the breach decides not to enter into any contractual
relationship with the party committing the breach. It
also observed that between two private parties the
right to take any such decision is absolute and
untrammeled by any constraints whatsoever. The
observations are too sweeping in their ambit
and wholly overlook the fact that the
respondent-Corporation is a statutory body
vested with the duty to discharge public
functions. It is not a private party. Any decision
to blacklist should be strictly within the
parameters of law and has to comport with the
principle of proportionality."
8.10. In administrative law the principle of audi alteram
partem has been held to be a fundamental principle of
the rules of natural justice. This requires the maker of a
decision to give prior notice of the proposed decision to
the person affected and an opportunity to make a
representation. The exercise of a power which affects the
rights of an individual must be exercised in a manner
which is fair and just and not arbitrarily or capriciously.
An administrative order involving civil consequences
must necessarily be made in conformity with rules of
natural justice. Any decision which has been made
without compliance of the aforementioned fundamental
principle of natural justice, i.e., the rule of audi alteram
partem, cannot be sustained. For the aforesaid
proposition of law reference may be made to the
decisions in Mahipal Singh Tomar Vrs State of Uttar
Pradesh and others, (2013) 16 SCC 771, Ridge Vrs.
Baldwin, (1963) 2 All ER 66 (HL), Chief Constable of North
Wales Plice Vrs. Evans, (1982) All ER 141 (HL), State of
Orissa Vrs Binapani Dei, AIR 1967 SC 1269, U.P.
Warehousing Corporation Vrs. Vijay Narayan Vajpayee,
(1980) 3 SCC 459.
8.11. Casual and perfunctory approach to debar person
without adhering to the principles of natural justice is
liable to be deprecated. As no fraud element is involved
in the case at hand, the case law in The Secretary, A.P.
Social Welfare Residential Educational Institutions Vrs.
Sri Pindiga Sridhar, (2007) 4 SCR 145 cited by Sri
Bibekananda Nayak, learned Additional Government
Advocate is misplaced being rendered under different
context. This Court, therefore, wishes to take note of
following observation of the Hon‟ble Supreme Court of
India in the case of Union of India Vrs. Arulmozhi
Iniarasu, (2011) 9 SCR 1:
"Before examining the first limb of the question,
formulated above, it would be instructive to note, as a
preface, the well settled principle of law in the matter of
applying precedents that the Court should not place
reliance on decisions without discussing as to how the
fact situation of the case before it fits in with the fact
situation of the decision on which reliance is placed.
Observations of Courts are neither to be read as Euclid‟s
theorems nor as provisions of Statute and that too taken
out of their context. These observations must be read in
the context in which they appear to have been stated.
Disposal of cases by blindly placing reliance on a decision
is not proper because one additional or different fact may
make a world of difference between conclusions in two
cases."
8.12. The central point is that debarment should not be used
casually or as a standard response for ordinary contract
breaches. The implication is that debarment is a serious
penalty and should be reserved for more egregious
circumstances.
8.13. With the above note, it is, therefore, concluded that the
Order dated 13.05.2025 being clearly violative of
principles of natural justice and bereft of reasons,
warrants indulgence of this Court.
9. Another point of significance has been canvassed by Sri
Subir Palit, learned Senior Advocate to contend that the
Collector of Sambalpur could not arrogate himself to the
position of Market Committee as envisaged under Rule
61 of the Odisha Agricultural Produce Markets Rules,
1958 in order to indirectly nullify the effect of the licence
given by the competent authority in exercise of power
conferred under Rule 60 of the Odisha Agricultural
Markets Rules, 1958.
9.1. As hearing of the matter has been taken up on the
concession of the counsel for both sides with respect to
principles of natural justice, this Court desists from
addressing such issue of jurisdiction on merit of the
matter. Since this Court finds in view of discussions
made in the foregoing paragraphs that there has been
serious violation of fundamental principles of natural
justice by the Collector, Sambalpur in taking decision
vide order dated 13.05.2025 (Annexure-10), suffice it to
say that such order cannot be sustained in the eye of
law and matter deserves to be remanded to the said
authority for fresh decision by ascribing reasons.
9.2. It is to be noted that before proceeding with a matter,
quasi judicial authority is required to verify his own
jurisdiction. A Division Bench of this Court observed in
B.P. Enterprises Vrs. State of Odisha, 2008 SCC OnLine
Ori 532 that,
"Before parting with the case, we would like to point out
that every day we are facing the assessment orders, in
respect of the TIN dealers, passed by the assessing
authority, circle, though such assessment orders are in
violation of the statutory provisions as can be passed only
by assessing authority, range. Even if the dealer does not
take any objection in this regard, it becomes the duty of
the assessing authority himself to keep the jurisdictional
issue in mind."
9.3. In the same tenor, this Court by remanding the matter
for fresh consideration requests the Collector,
Sambalpur to examine his jurisdiction and authority to
proceed with the matter as agitated by the learned
Senior Counsel herein this case.
9.4. In Doki China Gurubalu and Sons and Co. Vrs. State of
Orissa and others, 1991 SCC OnLine Ori 93 = AIR 1992
Ori 189 = 73 (1992) CLT 468, in the context of
maintainability of writ petition with reference to right
flowing from a contract, it has been held that
"9. In our view, the present case comes even within the
ratio of Radhakrishna Agarwal Vrs. State of Bihar,
AIR 1977 SC 1496 case. The Supreme Court did not
categorically hold that an application under Article
226 for enforcement of fundamental rights under
Article 14 was not maintainable in any
circumstances, where the right flowed from a
contract. Had it so held, it would not have gone into
the question that the petitioner in that case had not
laid the foundation by appropriate pleadings to
make out a case of violation of fundamental rights
under Article 14. Hence, in our view, it cannot be
said as an absolute rule of law, that in no
circumstances, a writ application for issue of
mandamus can lie if the right involved flows from a
contract. That would be circumscribing the
extraordinary jurisdiction of this Court which was
intended by the Founding Fathers to function as the
sentinel always in the alert. Where without any
authority of law, by an executive fiat, rights are
trampled arbitrarily, this Court cannot and should
not shut its door to the aggrieved party. Where
valuable civil rights are taken away without
any authority of law or by violation of
principles of natural justice, this Court cannot
fold its hands and look on as an helpless
onlooker asking the party to approach the civil
Court. Where there are disputed questions of fact,
evidence is to be led by the parties and it would be
necessary to scan and assess the same, it is a
different matter. The ultimate remedy of suit should
be followed. Whether extraordinary jurisdiction
should be exercised in a matter is in the
discretion of this Court. Where a person has been
deprived of his valuable civil rights by executive fiat
without any justification in law, it would be futile to
contend that this Court should refuse to exercise
jurisdiction under Article 226.
10. We have considered the decision of the Government
and we are of the view that the allegations which
were accepted by the Government ex parte without
giving the petitioner an opportunity of hearing did
not only cast a stigma on it but affected its civil
rights of which it cannot be deprived without
following the principles of natural justice. We are
not deciding whether in fact the petitioner
violated the terms and conditions but we quash
the order on the ground, namely, for violation
of the principles of natural justice.
11. We may also notice in this connection a decision of
this Court in Hrudananda Patra Vrs. Revenue
Divisional Commissioner, AIR 1979 Orissa 13,
where various decisions of the Supreme Court were
taken note of and it was held that a monopoly could
not be created by an administrative order. It could
be created only by law made in the interest of the
general public or in favour of the State or a
Corporation owned and controlled by the State. A co-
operative society is neither a State nor owned or
controlled by the State. Hence, no monopoly can be
created in respect of the cooperative society. The
stand taken in the counter-affidavit was
unsustainable on this ground also."
9.5. There is nothing in the impugned order dated
13.05.2025 (Annexure-10) or in the joint enquiry report
dated 06.05.2025 enclosed to counter affidavit to show
that opportunity of hearing was afforded to the petitioner
before passing the aforesaid order of debarment. Nothing
is suggestive that during the course of the enquiry the
petitioner was invited to proffer any explanation.
Learned Additional Government Advocate appearing for
the opposite party Nos.1 and 6 does not dispute the fact
(rather fairly conceded) that no opportunity of hearing
was afforded to the petitioner before passing the
aforesaid impugned order or during the enquiry
proceedings for it would be an empty formality. Such an
argument at the behest of State Counsel is liable to be
repelled in view of precedents on the principles of
natural justice as discussed above.
Conclusion:
10. In the wake of aforesaid discussion and position of law
as enunciated by different Courts, this Court has no
hesitation to set aside the order dated 13.05.2025
passed by the Collector-cum-District Magistrate,
Sambalpur (Annexure-10).
11. The writ petition is disposed of by remitting the matter to
the Collector-cum-District Magistrate, Sambalpur with a
direction to issue a show cause notice to the petitioner
within two weeks stating therein specific points along
with any adverse material, if any, that would be utilised
against the it for the purpose of taking fresh decision
and the petitioner shall have two weeks thereafter to
submit his reply/objections including the point of
jurisdiction/authority of the Collector-cum-District
Magistrate to proceed with debarment of the petitioner,
which has been granted licence under the Odisha
Agricultural Produce Markets Act, 1956. The Collector-
cum-District Magistrate, Sambalpur, shall, thereafter,
pass a reasoned and speaking order preferably within
next four weeks in accordance with law, after affording
reasonable opportunity of being heard to the petitioner.
Needless it is to say that such order or decision taken by
the authority concerned shall be communicated to the
petitioner.
12. With the aforesaid observation(s) and direction(s), the
writ petition and the pending interlocutory
circumstances, there shall be no order as to costs.
Designation: Personal Assistant
(Secretary-in-Charge)
Reason: Authentication
Location: ORISSA HIGH COURT,
CUTTACK
Date: 14-Jun-2025 13:45:08
(MURAHARI SRI RAMAN)
VACATION JUDGE
High Court of Orissa, Cuttack
The 13th June, 2025//Aswini
