Natural justice and speaking orders: cancellation based on undisclosed material and ex parte statements was quashed and remanded.

An adverse administrative cancellation order based on an enquiry report and statements recorded behind the contractor's back could not stand because the relied-upon material was not supplied and no real opportunity was given to meet the allegations or cross-examine the witnesses. The order was also invalid as a non-speaking order, since it merely rejected the reply without meaningful reasons. The Court further noted that the procedure insisted on by the authority, requiring a written option before use of a lower rate or composition mode, was not part of the prescribed process. The order was quashed for breach of natural justice, and the matter was remitted for fresh decision after disclosure of material and hearing.

---

---

Issues: Whether the order cancelling the contract and forfeiting security could be sustained when it was founded on material collected behind the contractor's back without supplying the material or affording an opportunity of cross-examination, and whether the order was invalid as a non-speaking order.

Analysis: The cancellation order was based on an enquiry report and statements recorded by the department without notice to the contractor. The material relied upon was not furnished to him, and he was not given an opportunity to meet the adverse material or cross-examine the persons whose statements were used against him. The order also contained only a brief rejection of the reply and did not disclose any meaningful reasoning. In these circumstances, the minimum requirements of fair play were not satisfied. The Court also held that the procedure suggested by the authority, requiring a written option before availing the lower rate or composition mode, was not part of the prescribed procedure.

Conclusion: The order could not be sustained for violation of natural justice and for being non-speaking; it was set aside and the matter was remitted for a fresh decision after supplying the relied-upon material and granting adequate opportunity of hearing.

Final Conclusion: The contractor succeeded in having the cancellation order quashed, but the authority was permitted to decide the matter afresh after following due process.

Ratio Decidendi: An adverse administrative order founded on undisclosed material or ex parte statements cannot be sustained unless the affected party is supplied the material and given a fair opportunity to rebut it, including cross-examination where demanded, and the order must be supported by reasons.

---