Absence Of Reasons In Show Cause Notice Makes It Unsustainable For Want Of Compliance With Principle Of Natural Justice: Delhi High Court

  • Shruti Kakkar
  • 12:46 PM, 21 Feb 2021

The Delhi High Court has recently observed that a show-cause notice in the absence of reasons is unsustainable for want of compliance with principles of natural justice.

"Show Cause Notice did not disclose the reasons for denial of security clearance to the petitioner company. Clearly, in the absence thereof, the petitioner was handicapped in giving any effective reply to the same.", Single Bench of Justice Navin Chawla noted.

In the present matter, the petitioner challenged the show cause notice dated 30.07.2020 issued by respondent no 2, informing the petitioner that based on the inputs received from respondent no.3/Ministry of Home Affairs, respondent no. 1/Ministry of Civil Aviation: its letter dated 26.06.2020 has denied the renewal of the petitioner's security clearance. Since the petitioner did not comply with Para 11 of the Civil Aviation Regulations Section 3, Series-C, Part-III, he was called upon to show cause as to why its Air Operator Permit be not cancelled.

The Counsel for the petitioner submitted that the Impugned Orders violated the principles of natural justice as the Show Cause Notice did not give any reasons for denial of security clearance to the petitioner. Reliance by the petitioner's Counsel was placed on Jindal Steel and Power Ltd. and Anr. vs Union of India and Ors. In similar circumstances, the Court directed the show cause notice to be treated as withdrawn and further directed the respondent to serve a fresh notice to the petitioner allowing him to give a satisfactory reply. Reference was also made to the judgment of this Court in A.K. Sharma vs Director General of Civil Aviation & Ors., MANU/DE/0443/2002 to contend that the principles of natural justice would come into play even in respect of an administrative action which affected the civil rights of a citizen unless they were explicitly or by necessary implication, excluded.

The issue that arose for consideration was whether such Show Cause Notice was to give/contain reasons why its security clearance was being revoked.

The Bench observed that the show cause notice was equally tainted for want of compliance with natural justice principles and couldn't be sustained. Reference was made to the judgement of Oryx Fisheries Private Limited vs Union of India and Ors., (2010) 13 SCC 427, in which the Court observed that at the stage of the show-cause, the person proceeded against must be told the charges against him and the allegations on which they are based and be given a reasonable opportunity of making objections against proposed charges indicated in the notice. Instead of telling him the charges, the show-cause notice cannot confront him with definite conclusions of guilt. If that is done, then the entire proceedings initiated by the show cause notice would get vitiated by unfairness, and the subsequent proceedings would become an idle formality.

Further, concerning the respondent's Counsel's contention that the remedy of appeal was available to the petitioner, the Bench relied on the Supreme Court judgement of Aslam Mohammed Merchant vs Competent Authority & Ors., (2008) 14 SCC 186, in which it was held that once the Show Cause Notice issued under the provisions of the Narcotic Drugs and Psychotropic Substances Act, 1985 is found to be illegal, the same would vitiate all subsequent proceedings to observe that initial non-compliance with the principles of natural justice could not be remedied in an appeal.

Thus, while setting aside the impugned orders, the Court observed that the allegations on which the security clearance was revoked were not of such nature that could put the petitioner for eliciting its response. "The submission of the respondent that the same being secretive could not be put to the petitioner cannot be accepted. The conviction and the consequence thereof was not of such nature to attract the Official Secrets Act, 1923 or a plea of privilege by the respondents. Therefore, the Show Cause Notice issued in the absence of such disclosure was perfunctory and could not have had any meaningful response from the petitioner. There was a clear violation of principles of natural justice.", the Bench further observed.

Case Title: M/S AR Airways Pvt Ltd V. Union Of India & Ors

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