Natural justice requires a hearing before discretionary waiver of penalty where civil consequences may follow.

Exercise of statutory discretion to waive penalty under the third proviso to Section 4M of the Imports and Exports (Control) Act, 1947 attracts the principles of natural justice because it may affect civil consequences. The court held that, unless the statute clearly excludes it, a fair opportunity to represent one's case is ordinarily implied, including a personal hearing where appropriate. Applying audi alteram partem, it answered that an opportunity of hearing is required before deciding whether to waive penalty in whole or in part.

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Issues: Whether, before exercising discretion under the third proviso to Section 4M of the Imports and Exports (Control) Act, 1947 to waive penalty in whole or in part, an opportunity of hearing, including a personal hearing, is required as a matter of natural justice.

Analysis: The order reiterates that judicial decisions must be read in their factual setting and not as statutory texts. It explains that natural justice is grounded in fair play and common fairness, and that the core requirement relevant here is audi alteram partem. Even where a statute does not expressly provide for a hearing, the requirement of a fair opportunity to represent one's case is ordinarily read into the provision unless specifically excluded. The nature of the power under the proviso, which affects civil consequences, attracts the minimum safeguards of fair procedure.

Conclusion: Yes. An opportunity of hearing is required before deciding whether to waive penalty under the third proviso to Section 4M of the Imports and Exports (Control) Act, 1947.

Final Conclusion: The reference was answered by holding that principles of natural justice apply to the exercise of the discretionary power under the proviso, and the matter was then disposed of as infructuous.

Ratio Decidendi: Where the exercise of statutory discretion may affect civil consequences, and the statute does not clearly exclude it, the requirement of a fair hearing is ordinarily implied by the principles of natural justice.

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