2013 (10) TMI 1467 - SC - Indian Laws

100% EOU - Review of earlier order - Non-issuance of SCN - Doctrine of Audi Alteram Partem -fundamental right under article 14 - HELD THAT - no order could be passed against a person without issuing a show cause notice to him/it. Thus, the order passed by the Development Commissioner is in contravention to the principles of natural justice., therefore cannot be sustained. Matter restored back.

Summary

Issues:
1. Competency of the Development Commissioner to review its own order.
2. Requirement of issuing a show cause notice before passing a review order.
3. Violation of principles of natural justice and Article 14 of the Constitution of India.

Competency of the Development Commissioner to Review Order:
The case involved an appeal against a judgment by the High Court where the Development Commissioner's order was set aside. The High Court concluded that the Development Commissioner lacked the authority to review its own order without express power, as the power to review rested with the Ministry of Commerce and Industry. The Supreme Court, after hearing arguments from both sides, decided not to rule on the Development Commissioner's power to review. The Court emphasized that the Development Commissioner's omission to issue a show cause notice before passing the review order was a fundamental violation of natural justice principles and Article 14 of the Constitution of India. The Court highlighted the importance of natural justice principles, including the Audi Alteram Partem rule, which ensures a fair hearing for all parties involved. As a result, the Supreme Court set aside the Development Commissioner's review order.

Requirement of Issuing a Show Cause Notice:
The Supreme Court emphasized that before passing a review order, it is essential to issue a show cause notice to the concerned party. In this case, the Development Commissioner failed to provide a show cause notice to the respondent, which deprived them of the opportunity to defend themselves adequately. The Court reiterated that the issuance of a show cause notice is a fundamental aspect of natural justice, ensuring that parties are aware of the allegations against them and have a fair chance to present their case. The absence of a show cause notice in this case was deemed a violation of natural justice principles and Article 14 of the Constitution of India, leading to the setting aside of the review order.

Violation of Principles of Natural Justice and Article 14:
The Supreme Court's decision to set aside the review order was primarily based on the violation of natural justice principles and Article 14 of the Constitution of India. The Court stressed that the aim of natural justice is to prevent miscarriage of justice and ensure fairness in administrative actions. By not issuing a show cause notice, the Development Commissioner's order infringed upon the principles of natural justice, putting the respondent at a disadvantage and preventing them from defending themselves adequately. The Court highlighted the importance of fairness, impartiality, and reasonableness in administrative actions. Consequently, the Supreme Court directed the Ministry of Commerce and Industry to issue a show cause notice to the respondent and complete the review process within a specified timeline, emphasizing the significance of adhering to natural justice principles in administrative decisions.

In conclusion, the Supreme Court allowed the appeal, set aside the review order, and directed the Ministry of Commerce and Industry to follow the principles of natural justice by issuing a show cause notice and completing the review process within a specified timeframe.