Natural justice requires disclosure of relied-on material; non-supply of a SEBI order made the direction unsustainable.

An order based on material not supplied to a party, and relied on without giving an opportunity to respond, breaches the rule of fair hearing and natural justice. Here, a SEBI order was used during the hearing but was not furnished to the appellant, so the resulting direction was unsustainable. The impugned order was set aside for non-compliance with natural justice, and the matter was remitted for fresh consideration after hearing both sides.

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Issues: Whether the impugned order was liable to be set aside for breach of the principles of natural justice because a SEBI order was relied upon without furnishing it to the appellant and without giving an opportunity of response.

Analysis: The order under challenge had been passed after a SEBI order was placed before the authority during hearing, and the appellant was not supplied with that order or afforded an opportunity to meet it. The impugned direction was therefore founded on material to which the appellant had no response, attracting the rule of fair hearing.

Conclusion: The impugned order was set aside for non-compliance with natural justice, and the matter was remitted for fresh consideration after hearing both sides.

Ratio Decidendi: An order founded on material not supplied to a party, without affording a fair opportunity to respond, is unsustainable for breach of natural justice and must be set aside.

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