Case Note & Summary
The petitioner, M/s Alcon Real Estate Pvt. Ltd., challenged three orders dated 14.3.2008, 20.7.2009, and 17.2.2010 passed by the respondents under the Special Economic Zone (SEZ) framework. The primary challenge was to the order dated 14.3.2008 whereby the Development Commissioner imposed a penalty of Rs.1,00,000/- on the petitioner. The petitioner contended that the show cause notice was issued by the Assistant Development Commissioner on 22.3.2004, and a personal hearing was granted by the Joint Development Commissioner on 14.5.2007. However, the final order was passed by the Development Commissioner, who had not heard the petitioner. This, the petitioner argued, violated the settled principle of natural justice that the authority who hears the case must decide it. The petitioner relied on the Supreme Court judgment in Gullapalli Nageswara Rao and others Vs Andhra Pradesh State Road Transport Corporation and another, 1959 AIR (SC) 308. The respondent no.1's counsel candidly admitted that the authority who passed the order did not hear the petitioner, and the authority who heard did not pass the order. The court found that the impugned order dated 14.3.2008 was passed by the Development Commissioner, while the show cause notice was issued by the Assistant Development Commissioner and the hearing was conducted by the Joint Development Commissioner. The court held that this procedure clearly violates the principle that the person who hears must decide, which is a fundamental principle of natural justice. Consequently, the court quashed and set aside the impugned order dated 14.3.2008 and all subsequent orders dated 20.7.2009 and 17.2.2010. The matter was remitted back to the respondent no.1 for fresh consideration in accordance with law, after giving an opportunity of hearing to the petitioner. The rule was made absolute in those terms.
Headnote
A) Administrative Law - Natural Justice - Principle that person who hears must decide - Show cause notice issued by Assistant Development Commissioner, hearing conducted by Joint Development Commissioner, but order passed by Development Commissioner - Held that such procedure violates the fundamental principle of natural justice that the authority who hears the case must decide it, and the order is liable to be quashed (Paras 4-9).
Issue of Consideration
Whether the impugned order dated 14.3.2008 passed by the Development Commissioner imposing a penalty of Rs.1,00,000/- is sustainable when the show cause notice was issued by the Assistant Development Commissioner and the hearing was conducted by the Joint Development Commissioner, but the order was passed by the Development Commissioner, thereby violating the principle that the authority who hears the case must decide it.
Final Decision
The court quashed and set aside the impugned order dated 14.3.2008 and all subsequent orders dated 20.7.2009 and 17.2.2010. The matter was remitted back to respondent no.1 for fresh consideration in accordance with law, after giving an opportunity of hearing to the petitioner. Rule made absolute in those terms.
Law Points
- Natural Justice
- Audi Alteram Partem
- Principle that person who hears must decide
- Violation of principles of natural justice
- Quashing of order
Case Details
2024 LawText (BOM) (01) 238
WRIT PETITION NO. 284 OF 2011
BHARAT P. DESHPANDE, VALMIKI SA MENEZES
Mr. P. Sawant for petitioner, Mr. R. Chodankar for respondent no.1
M/s Alcon Real Estate Pvt. Ltd.
1. Development Commissioner, Seepz Special Economic Zone, Government of India, Ministry of Commerce & Industry, Andheri (E), Mumbai -96; 2. The Appellate Committee, Ministry of Commerce & Industry, Government of India, Department of Commerce, Udyog Bhawan, New Delhi -110 117
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Nature of Litigation
Writ petition challenging orders imposing penalty under SEZ framework for alleged violation of natural justice.
Remedy Sought
Petitioner sought quashing of orders dated 14.3.2008, 20.7.2009, and 17.2.2010 and restoration of the matter for fresh hearing.
Filing Reason
Petitioner challenged the penalty order on the ground that the authority who passed the order did not hear the petitioner, violating the principle that the person who hears must decide.
Previous Decisions
Show cause notice issued on 22.3.2004 by Assistant Development Commissioner; hearing conducted by Joint Development Commissioner on 14.5.2007; order dated 14.3.2008 passed by Development Commissioner imposing penalty of Rs.1,00,000/-; appeal filed on 23.4.2008 rejected on 20.7.2009; review filed on 14.8.2009 rejected on 17.2.2010.
Issues
Whether the impugned order dated 14.3.2008 passed by the Development Commissioner is sustainable when the show cause notice was issued by the Assistant Development Commissioner and the hearing was conducted by the Joint Development Commissioner, thereby violating the principle that the authority who hears the case must decide it.
Submissions/Arguments
Petitioner argued that the order dated 14.3.2008 was in breach of settled principles of law as the authority who hears the case must decide it; show cause notice was issued by Assistant Development Commissioner, hearing was given by Joint Development Commissioner, but order was passed by Development Commissioner.
Respondent no.1's counsel candidly admitted that the authority who passed the order did not hear the petitioner and the authority who heard did not pass the order.
Ratio Decidendi
The principle that the person who hears must decide is a fundamental principle of natural justice. Where a show cause notice is issued by one authority, hearing is conducted by another, and the order is passed by a third authority, the order is vitiated and liable to be quashed.
Judgment Excerpts
He would submit that the impugned order dated 14.3.2008 is in breach of settled principles of law, that the authority who hears the case has to decide the same.
Mr Chodankar, appearing for the respondent no.1 is candid enough in submitting that the authority who passed the impugned order did not hear the petitioner and authority who heard the petitioner did not passed the impugned order.
Impugned order dated 14.3.2008 is admittedly passed by Development Commissioner... The show cause notice was given by Assistant Development Commissioner on 22.3.2008 wherein hearing was before the Joint Development Commissioner...
Thus, the principle that the person who hears must decide is clearly violated in the present case.
Procedural History
Show cause notice issued on 22.3.2004 by Assistant Development Commissioner; hearing conducted by Joint Development Commissioner on 14.5.2007; order dated 14.3.2008 passed by Development Commissioner imposing penalty of Rs.1,00,000/-; appeal filed on 23.4.2008 rejected on 20.7.2009; review filed on 14.8.2009 rejected on 17.2.2010; writ petition filed in 2011; rule issued on 5.10.2011; judgment delivered on 5.1.2024.
