Natural justice bars punitive financial directions where decisive policy basis was never disclosed in show-cause proceedings.

Debarment of exporters under the quota policy was supportable for alleged fraudulent activity and policy violations, but the monetary and consequential directions could not stand because the later notification and other decisive material were not disclosed in the show-cause notices. The affected parties were denied a fair opportunity to meet the basis for compensation, penalty, deposit directions, and the recommendation to suspend the Import Export Code. Those directions were therefore set aside for breach of natural justice, while the issue of such liability was left open for fresh consideration by the competent authority.

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Issues: (i) Whether the authority under the Quota Policy could validly impose compensation, penalty, and directions to deposit amounts and seek suspension of the Import Export Code. (ii) Whether such punitive and financial directions could be sustained when the petitioners were not put on notice of the notification and material relied upon for those directions.

Issue (i): Whether the authority under the Quota Policy could validly impose compensation, penalty, and directions to deposit amounts and seek suspension of the Import Export Code.

Analysis: The debarment of the exporters was supportable under the relevant quota policy provision dealing with fraudulent activity and violations. However, the further monetary directions were sought to be justified by reliance on a later notification and other material that were not part of the show-cause foundation. The asserted powers under the policy and allied materials could not be extended to sustain those financial and consequential directions on the record as it stood.

Conclusion: The debarment could stand, but the compensation, penalty, deposit directions, and recommendation regarding the Import Export Code could not be sustained as finally made.

Issue (ii): Whether such punitive and financial directions could be sustained when the petitioners were not put on notice of the notification and material relied upon for those directions.

Analysis: The show-cause notices did not disclose the later notification or the specific basis ultimately invoked to impose compensation and penalty. The petitioners were therefore denied a fair opportunity to meet the decisive material relied upon against them. The orders were thus vulnerable for breach of procedural fairness and required reconsideration by the original authority.

Conclusion: The impugned monetary and consequential directions were set aside and the matter was remanded for fresh consideration in accordance with law and natural justice.

Final Conclusion: The writ petitions succeeded to the extent of setting aside the impugned monetary and consequential directions, while leaving the question of such liability open for fresh adjudication by the competent authority.

Ratio Decidendi: A punitive or financial direction cannot be sustained where the decisive statutory or policy basis for that direction was not put to notice in the show-cause proceedings and the affected party was not given an opportunity to meet it.

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