No One Can Be Inflicted With An Adverse Order Without Being Afforded A Minimum Opportunity Of Hearing: SC [Read Judgment]

No one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing, remarked the Supreme Court while quashing an order passed by Uttar Pradesh Government directing its Medical and Health Department to stop local purchase from Daffodills, a pharmaceutical supplier.

This order was issued by the Principal Secretary to the Government of U.P. stating that a first information report (FIR) had been lodged against Daffodills alleging that it had committed offences, and that the Central Bureau of Investigation (CBI) was inquiring into the issue.

The bench of Justice Rohinton Fali Nariman and Justice S. Ravindra Bhat observed that any executive decision maker proposes a drastic adverse action, such as a debarring or blacklisting order, it is necessary that opportunity of hearing and representation against the proposed action is given to the party likely to be affected. It said that the directive, in effect, is in the nature of debarring and preventing the local purchase of medicines from Daffodills for an indefinite duration. The bench observed:

In the present case, even if one assumes that Surender Chaudhary, the accused in the pending criminal case was involved and had sought to indulge in objectionable activities, that ipso facto could not have resulted in unilateral action of the kind which the State resorted to- against Daffodils, which was never granted any opportunity of hearing or a chance to represent against the impugned order. If there is one constant lodestar that lights the judicial horizon in this country, it is this: that no one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing, and prior intimation of such a move. This principle is too well entrenched in the legal ethos of this country to be ignored, as the state did, in this case.

The High Court, while dismissing the petition filed by Daffodils had held that in matters of award of public contracts, the scope of inquiry in judicial review is limited. Disapproving this approach, the bench added:

"Granted, such jurisdiction is extremely circumscribed; no doubt the court had refused to grant relief to Daffodils against its plea of wrongful rejection of its tender. However, what the impugned judgment clearly overlooks is that the action of the state, not to procure indefinitely, on an assumption of complicity by Daffodils, was in flagrant violation of principles of natural justice." 

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