Recently, the Allahabad High Court set aside the orders cancelling the registration of a real estate company, holding that the impugned orders were passed without application of mind and violated the principles of natural justice. The matter arose from the cancellation of the petitioner’s registration on account of alleged non-filing of returns, and the Court observed that such action, affecting the petitioner’s right to carry on business under Article 19(1)(g) of the Constitution, could not stand without a reasoned order and opportunity for hearing.
Brief Facts:
The petitioner, a private limited company engaged in real estate business, received a show-cause notice for non-filing of returns. Subsequently, an ex-parte order cancelled its registration. The petitioner challenged the cancellation through an appeal, which was dismissed on the ground of limitation. The petitioner then approached the High Court, asserting that it was not provided a proper notice or opportunity to be heard, and that the cancellation order lacked reasoning.
Contentions:
The petitioner’s counsel argued that the impugned orders violated natural justice, were devoid of reasons, and infringed the petitioner’s constitutional rights under Article 19(1)(g). It was submitted that the appeal was dismissed merely on technical grounds, and the doctrine of merger could not apply. Reliance was placed on judgments including M/s M Y Ent Bhatta v. State of U.P., Surya Associates v. Union of India, and One Place Infrastructure v. State of U.P., highlighting the requirement of reasoned orders in matters affecting business rights.
The State contended that the orders were passed in accordance with law and that the grounds for cancellation were sufficient. The counsel for respondents also relied on precedents to argue that delay in appeal barred the petitioner from relief.
Observations of the Court:
The Court examined the records and noted that the show-cause notice itself did not mention the proper officer before whom the petitioner was required to appear, rendering it legally defective. The Court observed, “Once the impugned cancellation order has been passed without putting any proper notice or affording any opportunity of hearing to the petitioner, the same itself is in violation of principles of natural justice.”
Further, the Court emphasized that the quasi-judicial order, affecting the right to conduct business, was issued without application of mind and failed to comply with Article 14 of the Constitution. The Court cited precedents such as Ashok Kumar Vishwakarma and Surya Associates, noting that even where appeals are dismissed on grounds of limitation, orders lacking reasons cannot sustain, and the doctrine of merger has no application.
The Court also highlighted that the petitioner must be provided a proper opportunity to respond to show-cause notices, and that adjudicating authorities are required to pass reasoned, speaking orders after considering the petitioner’s submissions.
The decision of the Court:
The Court quashed the impugned cancellation orders and allowed the writ petition. The matter was remanded to the adjudicating authority, directing it to issue a fresh notice to the petitioner specifying the reasons for proposed cancellation. The petitioner is required to file a reply within 21 days of receipt of the notice, after which the authority shall pass a reasoned and speaking order within two weeks, ensuring an opportunity of hearing to the petitioner.
Case Title: M/S Implex Infrastructure Pvt Ltd And Another Vs. State Of U.P. & Others
Case No.: Writ Tax No. - 1915 of 2025
Coram: Justice Piyush Agrawal
Advocate for Petitioner: Adv. Nishant Mishra, Parinita Gupta
Advocate for Respondent: C.S.C.
Read Judgment @Latestlaws.com
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