Rakesh Industrial Stitching Thr Its Proprietor vs. The Union Of INDIA Thr The Secretary And Ors

Held

The Court held that the rejection of the petitioner's declaration by the designated authority was in violation of the principles of natural justice. The order dated 10.01.2020 was quashed and set aside. The Court reasoned that when a decision has civil consequences for a party, such as the rejection of a declaration under a dispute resolution scheme, the principles of natural justice, including the right to a hearing, must be complied with. The cryptic nature of the rejection order, which lacked specific reasons, further underscored this violation. The Court relied on its previous judgment in Magnum Management & Services Pvt. Ltd. Vs. Union of India & Ors., which emphasized the necessity of granting an opportunity of hearing before rejecting a declaration. The Court explicitly stated that it was not expressing any opinion on the merits of the petitioner's declaration. The designated authority was directed to reconsider the petitioner's declaration after affording an opportunity for a personal hearing. The notice for this hearing was to be given at least 7 days in advance, and the final order was to be a reasoned one if the petitioner's explanation was not accepted. The entire exercise was to be completed within eight weeks.

Facts

The petitioner, Rakesh Industrial Stitching, filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The respondent No. 2, the designated authority, rejected this declaration through a cryptic order dated 10.01.2020, stating only that "investigation already initiated by department." The petitioner contended that this rejection was made without providing any reasons or an opportunity for a personal hearing. The petitioner relied on a prior judgment of the same High Court in Magnum Management & Services Pvt. Ltd. Vs. Union of India & Ors., which dealt with an identical situation. The revenue, represented by Mr. Ochani, conceded that the facts in the present case were almost identical to the cited judgment.

Key Issues

1. Whether the rejection of the petitioner's declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, by the designated authority, without providing a reasoned order and an opportunity for a personal hearing, violates the principles of natural justice, thereby rendering the decision invalid? This issue turns on the interpretation and application of principles of natural justice in the context of the scheme and Section 127 of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019. Petitioner's Arguments: The petitioner argued that the rejection order was cryptic and lacked material particulars, failing to provide any reasons for the rejection. They contended that principles of natural justice, specifically the right to a hearing, were violated, making the decision invalid. They relied on the judgment in Magnum Management & Services Pvt. Ltd. Vs. Union of India & Ors., which held that a personal hearing is obligatory before rejecting a declaration under the scheme. Revenue's Arguments: The revenue, through Mr. Ochani, did not contest the facts being identical to the cited judgment and did not present any arguments against the petitioner's contentions.