Natural justice in renewal refusals requires hearing and reasons where civil consequences arise, even for a foreign entity.

Where refusal of renewal of permission under FERA affected ongoing business activity and civil consequences, the Court held that audi alteram partem was not excluded by mere statutory silence. Principles of natural justice applied even to a foreign entity, and repeated past renewals created a legitimate expectation that renewal would not be refused without an opportunity of representation. In the absence of any special urgency or administrative necessity, the refusal could not stand without a prior hearing and a reasoned decision. The impugned refusal was set aside and the matter was remitted for reconsideration after hearing the applicant and passing a speaking order.

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Issues: Whether refusal of renewal of permission under section 29(1)(a) of the Foreign Exchange Regulation Act, 1973 could be made without affording the applicant a hearing and without giving reasons, and whether the principles of natural justice applied notwithstanding that the applicant was a foreign entity.

Analysis: The statutory scheme did not contain any clear exclusion of the audi alteram partem rule for applications under section 29(1)(a). The Court treated the silence of the provision as insufficient to infer exclusion by necessary implication, particularly where the refusal affected ongoing business activity and had serious civil consequences. It further held that principles of natural justice are not confined to citizens and protect all persons against arbitrary State action. The repeated renewals granted over a long period had created a legitimate expectation that renewal would not be withheld without an opportunity of representation. The Court also found no special urgency or administrative necessity justifying departure from fair hearing requirements.

Conclusion: The refusal of extension could not stand without prior hearing and a reasoned decision, and the petitioner was entitled to be heard before the application was finally decided.

Final Conclusion: The petition succeeded, the impugned refusal was set aside, and the respondents were directed to reconsider the extension request after granting a proper hearing and passing a reasoned order.

Ratio Decidendi: Unless a statute clearly excludes it, the principles of natural justice, including the right to be heard, are read into administrative decisions that affect civil consequences and legitimate expectations, even where the affected person is an alien.

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