Non-supply of a relied-upon enquiry report violates natural justice and vitiates adverse contractual action.

The petitioner was engaged as a Handling-cum-Transportation Agent at PWS Daraunda under an agreement stated to be valid from 8 July 2024 to 7 July 2026.

During the contract period, the Food Corporation of India issued notices alleging inadequate deployment of labour and vehicles, delays in unloading and transportation of foodgrains, abnormal demurrage and wharfage charges, and violations of the Model Tender Form.

By order dated 26 December 2025, the respondents terminated the agreement with immediate effect, directed completion of the remaining work at the petitioner’s cost through another contractor, forfeited the security deposit, and debarred the petitioner from participating in the Corporation’s tenders for two years.

The petitioner challenged the order principally on the ground that an enquiry report referred to in the show-cause notice had not been supplied to him, although it was relied upon by the competent authority while taking adverse action.

Whether the termination of the petitioner’s contract, forfeiture of security deposit, and debarment were vitiated by violation of the principles of natural justice because the enquiry report relied upon by the respondents was not supplied to him before the adverse decision was taken?

Whether the respondents’ reliance on other notices, operational records, and alleged contractual defaults could cure the failure to furnish the enquiry report specifically relied upon in the decision-making process?

The Court applied the principles of natural justice and reasonable opportunity in proceedings resulting in civil consequences.

Relying on the Constitution Bench decision in Managing Director, ECIL v. B. Karunakar, (1993) 4 SCC 727, it held that where an enquiry officer’s report is considered by the disciplinary or competent authority before imposing an adverse consequence, the affected person must be furnished a copy of the report and given an opportunity to submit an effective representation against its findings.

The Court further held that a report cannot be treated as an inconsequential internal document once the authority relies upon it in initiating and deciding the proposed adverse action.

The show-cause notice dated 14 November 2025 expressly referred to an enquiry report concerning the petitioner’s alleged operational lapses and abnormal demurrage charges, and the proposed action was based, at least in part, on the material contained in that report.

Although the petitioner consistently asserted that the report had not been furnished, the respondents produced no material establishing that it was supplied before the impugned order was passed.

Applying ECIL v. B. Karunakar, the Court held that the petitioner could not effectively controvert the report’s findings or explain the circumstances recorded in it without access to the report.

The existence of other notices and operational records did not cure the procedural defect because the enquiry report constituted material relied upon by the competent authority in reaching its conclusion.

The order dated 26 December 2025 terminating the contract, forfeiting the security deposit, and debarring the petitioner was set aside.

The matter was remitted to the competent authority with directions to furnish the enquiry report to the petitioner, provide him an opportunity of personal hearing, and pass a fresh, reasoned order in accordance with law.

The writ petition was accordingly allowed, and pending applications, if any, were disposed of.