Natural justice and derivative penalty: incomplete remand adjudication was set aside, with fresh consideration ordered.

Failure to examine the voluminous evidence directed in remand and repetition of the earlier adjudication order rendered the fresh decision incomplete and justified de novo reconsideration. The matter was therefore set aside and remitted for fresh adjudication after proper evaluation of all relevant material. The penalty on the managing director, being dependent on the final outcome against the company, could not be sustained while the substantive charges remained unsettled. The result was that the adjudication was reopened and the connected penalty was kept in abeyance pending final determination of the company's liability.

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Issues: (i) Whether the impugned adjudication order was liable to be set aside and the matter remanded for fresh consideration on account of failure to consider the evidence and alleged breach of natural justice; (ii) Whether the penalty imposed on the managing director could survive independently of the final adjudication against the company.

Issue (i): Whether the impugned adjudication order was liable to be set aside and the matter remanded for fresh consideration on account of failure to consider the evidence and alleged breach of natural justice.

Analysis: The remand proceedings were required to comply with the earlier direction to examine the voluminous evidence produced by the appellants. The impugned order substantially repeated the earlier order and did not reflect consideration of the material that had been specifically directed to be examined. In these circumstances, the order was not treated as a proper fresh adjudication and the matter required de novo consideration.

Conclusion: The impugned adjudication order was set aside and the matter was remanded for fresh adjudication after considering all relevant evidence.

Issue (ii): Whether the penalty imposed on the managing director could survive independently of the final adjudication against the company.

Analysis: The liability of the managing director was held to be dependent on the final determination of the charges against the company. Since the substantive adjudication itself was being reopened, the penalty could not be sustained at that stage.

Conclusion: The penalty on the managing director was not sustainable until the charges against the company were finally decided.

Final Conclusion: The appeals succeeded to the extent that the adjudication was reopened and sent back for fresh decision, and the connected penalty could not stand independently at that stage.

Ratio Decidendi: An adjudication order that fails to consider material evidence and does not comply with directions for fresh consideration after remand is liable to be set aside for de novo adjudication; a derivative penalty cannot survive while the substantive liability remains unsettled.

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