Directory notice rule and fair hearing: denial of first adjournment in penalty proceedings prejudiced the defence and required reconsideration.

Rule 5 of the Haryana Imposition of Penalty Rules, 2003 was construed as directory rather than mandatory: although notice is to fix a date within seven days, the Collector may grant further time in a fit case without violating the Rule. The Court also held that refusing the first request for adjournment, where the Accounts Manager was absent and serious penal consequences were involved, denied a fair opportunity to reply and was inconsistent with natural justice. The denial of any opportunity to meet the material relied on caused prejudice and could not sustain the penalty proceedings as conducted, requiring a fresh decision after giving an opportunity of defence.

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Issues: (i) Whether Rule 5 of the Haryana Imposition of Penalty Rules, 2003 limited the Collector to decide the matter within seven days and excluded any further adjournment or time to file a reply. (ii) Whether refusal of the first request for adjournment, in the facts of the case, violated the principles of natural justice and caused prejudice, warranting interference with the penalty order.

Issue (i): Whether Rule 5 of the Haryana Imposition of Penalty Rules, 2003 limited the Collector to decide the matter within seven days and excluded any further adjournment or time to file a reply.

Analysis: Rule 5 requires notice fixing a date not later than seven days from issuance, but it does not prohibit the Collector from granting additional time in a fit case. The provision was construed as directory so that the procedure remains consistent with fairness and does not enable arbitrary rejection of genuine requests for time.

Conclusion: The Rule is directory, and the Collector could grant further time where the circumstances so justified.

Issue (ii): Whether refusal of the first request for adjournment, in the facts of the case, violated the principles of natural justice and caused prejudice, warranting interference with the penalty order.

Analysis: The request for adjournment was made at the first hearing and was based on the absence of the Accounts Manager. The Court held that some time ought to have been granted, especially because serious penal consequences were being imposed and the authorities were relying on statements and documents that had not been met with a reply. The denial of any opportunity to file a defence was held to be inconsistent with fair hearing and prejudicial to the petitioners.

Conclusion: The refusal of adjournment violated natural justice and prejudiced the petitioners.

Final Conclusion: The penalty proceedings could not be sustained as conducted, and the matter was sent back for a fresh decision after giving the petitioners an opportunity to reply.

Ratio Decidendi: A provision fixing an outer time limit for notice will be treated as directory when necessary to preserve natural justice, and a first genuine request for time cannot be mechanically rejected where penal consequences follow without affording a fair opportunity of defence.

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