MAA BIRAJA SELF HELF GROUP, SAMBALPUR V. STATE OF ODISHA

WP(C)/15237/2025

AI Insights

The case revolves around the debarment of Maa Biraja Self Help Group from participating in the paddy procurement operations by the Collector-cum-District Magistrate, Sambalpur. The petitioner challenged the order under Articles 226 and 227 of the Constitution, arguing that the decision was made without jurisdiction, was cryptic, and violated the principles of natural justice. The court examined the procedural fairness of the debarment process, particularly the lack of opportunity for the petitioner to respond to the allegations and the absence of a reasoned order. The court emphasized the importance of adhering to the principles of natural justice in administrative decisions, especially those affecting civil rights.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 670144 (HC-CUTTACK)
• Appeal Type: High Court cases
• Pronouncement Date: 13-06-2025
• Assessment Year: misc
• Other Referred Cases: Mohinder Singh Gill and another Vrs. The Chief Election Commissioner, New Delhi and others, Commissioner of Police, Bombay Vrs. Gordhandas Bhanji, Bhikhubhai Vithalbhai Patel and others Vrs. State of Gujarat and another, M/s. Shree Ganesh Construction Vrs. State of Orissa, State of Punjab Vrs. Bandeep Singh, Taylor Vrs. 1 Ch.D. 426
• Laws Referred To: Articles 226 & 227 of the Constitution of India, 1950, Odisha Agricultural Produce Markets Act, 1956, Odisha Agricultural Produce Markets Rules, 1958
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: BIBEKANANDA NAYAK
• Assessee Lawyers: SUBIR PALIT; AMITABH MISHRA; ABHISEK KEJRIWAL
• Keywords: Civil consequences; Debarment; Jurisdiction; Natural Justice; Paddy procurement
• Section: 4(6); 61; 60

Judgement Text

" W.P.(C) No.15237 of 2025 Page 1 of 51 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 2 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 JUDGMENT 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 3 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 4 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 5 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 6 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 7 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 8 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 9 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 10 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 11 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 12 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 13 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 14 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 15 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 16 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 17 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 18 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 19 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 20 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 21 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 22 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 23 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 24 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 25 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 26 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 W.P.(C) No.15237 of 2025 Page 27 of 51 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 W.P.(C) No.15237 of 2025 Page 28 of 51 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 W.P.(C) No.15237 of 2025 Page 29 of 51 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 W.P.(C) No.15237 of 2025 Page 30 of 51 487 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 W.P.(C) No.15237 of 2025 Page 31 of 51 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 W.P.(C) No.15237 of 2025 Page 32 of 51 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 W.P.(C) No.15237 of 2025 Page 33 of 51 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.‟ W.P.(C) No.15237 of 2025 Page 34 of 51 ***” 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 W.P.(C) No.15237 of 2025 Page 35 of 51 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 W.P.(C) No.15237 of 2025 Page 36 of 51 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) W.P.(C) No.15237 of 2025 Page 37 of 51 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 W.P.(C) No.15237 of 2025 Page 38 of 51 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: W.P.(C) No.15237 of 2025 Page 39 of 51 „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 W.P.(C) No.15237 of 2025 Page 40 of 51 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 W.P.(C) No.15237 of 2025 Page 41 of 51 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 W.P.(C) No.15237 of 2025 Page 42 of 51 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 W.P.(C) No.15237 of 2025 Page 43 of 51 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 W.P.(C) No.15237 of 2025 Page 44 of 51 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 W.P.(C) No.15237 of 2025 Page 45 of 51 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 W.P.(C) No.15237 of 2025 Page 46 of 51 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 W.P.(C) No.15237 of 2025 Page 47 of 51 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. W.P.(C) No.15237 of 2025 Page 48 of 51 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 W.P.(C) No.15237 of 2025 Page 49 of 51 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 W.P.(C) No.15237 of 2025 Page 50 of 51 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). W.P.(C) No.15237 of 2025 Page 51 of 51 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 application(s), if any, stand disposed of, but in the circumstances, there shall be no order as to costs. (MURAHARI SRI RAMAN) VACATION JUDGE High Court of Orissa, Cuttack The 13th June, 2025//Aswini Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-Charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Jun-2025 13:45:08 Signature Not Verified "