Natural justice breach: adverse directions affecting a service receiver were quashed for lack of notice and hearing.

Adverse directions affecting a service receiver's rights and financial liability cannot be sustained when made without notice or opportunity of hearing. The High Court held that an adjudicatory order passed behind the affected party's back, and extending beyond the scope of the show-cause notice, violates natural justice. The disputed paragraphs were therefore quashed and set aside as against the petitioner.

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Issues: Whether the observations and directions in the order in original, made against the service receiver without notice or hearing, were liable to be quashed for violation of natural justice and for travelling beyond the show-cause notice.

Analysis: The impugned observations fastened adverse consequences on the petitioner, including directions affecting its financial liability, yet no notice was issued to the petitioner and no opportunity of hearing was afforded. Such directions were made in an order issued to the service provider and extended beyond the scope of the show-cause notice. An order that affects the rights of a person cannot be sustained when passed behind its back and without compliance with fair hearing requirements.

Conclusion: The disputed paragraphs were quashed and set aside as against the petitioner.

Ratio Decidendi: Adverse findings or directions affecting a person's rights or financial liability cannot be sustained unless that person is put to notice and given an opportunity of hearing, and an adjudicatory order cannot travel beyond the scope of the show-cause notice.

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