M.Ayyar vs. The District Manager

Facts

Three petitioners, M. Ayyar, P. Balachandran, and S. Balamurugan, filed writ petitions before the Madurai Bench of the Madras High Court. They challenged proceedings issued by the District Manager, Tamil Nadu State Marketing Corporation (TASMAC), Madurai (South). The initial proceeding was dated 21.05.2020, seeking recovery of money for alleged losses sustained by TASMAC from the petitioners. This was followed by a show-cause notice dated 17.06.2020. The petitioners argued that the show-cause notice was issued with a preconceived notion, effectively pre-determining the issue as if they had admitted guilt and paid the penalty. The respondent (TASMAC) contended that the earlier order of 21.05.2020 was withdrawn on 22.06.2020 because it was issued without a show-cause notice. The subsequent show-cause notice dated 17.06.2020 was issued after the withdrawal and was not based on any preconceived notion, merely narrating past events and calling for an explanation.

Held

The Court held that the impugned show-cause notice dated 17.06.2020 could only be construed as a show-cause notice and not a pre-determined order. The statements within the notice were to be taken as a narration of facts, and it could not be interpreted as an admission of guilt by the petitioners or a final decision. The Court found that the past happenings recorded in the notice would not preclude an independent decision on the issue. The petitioners' case could be considered independently based on their explanation. The Court directed the petitioners to provide their explanation to the show-cause notice within ten days. The respondent was ordered to consider this explanation objectively and independently, passing a final order based solely on the available records and the petitioners' explanation, without being influenced by any preconceived notion. The respondent was to pass the final order within thirty days of receiving the explanation.

Key Issues

1. Whether the show-cause notice dated 17.06.2020, issued by the respondent, suffers from a preconceived notion, thereby rendering it liable for quashing under Article 226 of the Constitution of India? Petitioner's Argument: The petitioners contended that the show-cause notice was not a genuine request for explanation but a pre-determined order. They argued that the language used in the notice indicated a fixed conclusion, making it impossible for them to receive a fair hearing. They relied on the principle that a show-cause notice must be issued without bias or pre-judgment. Respondent's Argument: The respondent argued that the earlier order dated 21.05.2020 was withdrawn and the subsequent show-cause notice dated 17.06.2020 was issued correctly. They asserted that the notice merely narrated past events and sought an explanation for the imposition of a penalty and interest, without any preconceived notion. They contended that the notice was a standard procedural step and not a final determination.