Natural justice governs statutory approval refusals affecting contractual transactions; an unreasoned disapproval can be quashed in writ review.

A contractual arrangement did not bar writ jurisdiction where a public authority's refusal of approval had statutory significance and immediately affected civil rights and liabilities. The court held that the petitioner could maintain the writ petition because the disapproval prevented completion of the transaction. It further held that, where governmental approval is a condition precedent under the foreign exchange regime, the decision must be reasoned and preceded by a fair opportunity of hearing. As the record showed neither reasons nor hearing, the disapproval was illegal and liable to be quashed, and the transaction was left alive subject to the approval process.

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Issues: (i) Whether the petitioner could maintain a writ petition challenging the Central Government's disapproval of the proposed transaction though the underlying arrangement was contractual. (ii) Whether the Central Government's disapproval, which operated as a condition precedent to the transaction, was liable to be quashed for want of reasons and opportunity of hearing.

Issue (i): Whether the petitioner could maintain a writ petition challenging the Central Government's disapproval of the proposed transaction though the underlying arrangement was contractual.

Analysis: The contractual foundation of the claim did not by itself exclude writ jurisdiction where the impugned action was taken by a public authority exercising a power having statutory significance and the decision directly affected civil rights and liabilities. The refusal of approval nullified the petitioner's ability to complete the transaction and therefore had immediate adverse legal consequences. In such a situation, a writ remedy was maintainable to test the legality of the governmental action.

Conclusion: The petitioner was entitled to maintain the writ petition.

Issue (ii): Whether the Central Government's disapproval, which operated as a condition precedent to the transaction, was liable to be quashed for want of reasons and opportunity of hearing.

Analysis: Where governmental approval is the practical and legal prerequisite for completion of a transaction under the foreign exchange regime, the decision cannot rest on bare subjective satisfaction. It must conform to the principles of natural justice and be supported by reasons so that the affected parties can understand and challenge the basis of the decision. The record disclosed neither disclosure of reasons nor a fair opportunity to the contracting parties before the disapproval was issued. Such an unreasoned decision, affecting rights with civil consequences, was vulnerable to judicial review.

Conclusion: The disapproval order was illegal and liable to be quashed.

Final Conclusion: The governmental refusal of approval was set aside, the transaction was left alive subject to the necessary approval process, and a mandamus issued to prevent effect being given to the impugned decision.

Ratio Decidendi: Where a public authority's approval is a statutory condition precedent to a transaction and its decision directly affects civil rights, the decision must be reasoned and preceded by a fair opportunity of hearing; an unreasoned and procedurally unfair refusal is amenable to writ review and quashment.

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