Natural justice requires notice and hearing before penalty or debarment orders against directors can stand.

Penalty and debarment orders passed against directors were unsustainable where no separate show cause notice was issued to them and no opportunity of hearing was afforded before the adverse action. Because the proceedings carried serious penal consequences, compliance with the requirements of notice and hearing was essential. The orders were therefore liable to be quashed for breach of natural justice.

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Issues: Whether the penalty and debarment orders passed against the directors were sustainable in the absence of notice and hearing to them.

Analysis: The impugned orders were made against the directors by a common penalty order. The record showed that the directors were not issued a separate show cause notice and were also not afforded an opportunity of hearing before the adverse orders were passed against them. Since the proceedings resulted in serious penal consequences, compliance with the requirements of notice and hearing was essential.

Conclusion: The orders against the petitioner were unsustainable for breach of natural justice and were liable to be quashed.

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