Sabyasachi Mukharji, J.
1. The subject-matter of challenge in this application is the order dated the 15th Feb., 1978. By the said order the petitioner was communicated as follows:--
'The representation made by you under your above letter has been considered and it has been decided to ban business dealings with you for a periodof 5 (five) years with immediate effect.'
In order to appreciate the challenge to this order, it would be necessary to refer to certain facts. It appears that on or about the 6th June, 1977 the petitioner received a memorandum which was as follows :--
'It has come to notice that M/s. H. S. Kohli, handling contractors, Chittaranjan Locomotive Works, during the years 1969-70, indulged in the malpractice as detailed in the enclosed statement of charge.
In the circumstances, the Government of India propose to ban business dealings for a period of five years by the Indian Railways and Production Units etc. with M/s. H. S. Kohli as also their allied/sister concerns, if any. M/s. H. S. Kohli are hereby given an opportunity to show cause against the action proposed to be taken.
Any representation which M/s. H. S. Kohli may make in this regard will be considered. Such representations should be made in writing and submitted so as to reach the undersigned not later than fifteen days of the date of receipt of this memorandum. In case no such representation is received, it will be presumed that M/s. H. S. Kohli have no representation to make, and a final decision will then be taken on merits.' The said memorandum contained certain statements of charges and the said statement of charges were as follows:--
'Shri H. S. Kohli is the proprietor of M/s. H. S. Kohli Handling Contractors, who were in charge of the handling contract of Chittaranjan Locomotive Works during the years 1969-70. He was very close to the D. C. O. S. Shri Sewa Singh. Arising out of this friendship, a conspiracy was hatched between the following persons during 1969-70 for the clandestine removal of steel materials from the Chittaranjan Locomotive Works;
(a) Shri Sewa Singh, D. C. O. S. (b) Shri H. S. Kohli, proprietor of M/s. H. S. Kohli, (c) Shri Mulchand Agarwal, businessman, (d) Shri Sachindanand Singh. Ward Keeper, (e) Shri R.N. Dey Ward Keeper.
2. The conspiracy envisaged the removal of steel materials by M/s. H. S. Kohli, Handling Contractors and delivery of the same to Shri Mulchand Agarwal, businessman, making it appear that the removal of the material wasgenuine and authorised. To this end, Shri Avadesh Kumar Srivastava, an employee of M/s. H. S. Kohli arranged a number of wagons for the removal of the material and also prepared the bogus forwarding notes and R. Rs. in fictitious names of various parties. The acts mentioned above led to the removal of a number of wagons of steel valuing over Rs. 2 lakhs and a loss was thus caused to the Railway administration.
3. The above action of a reputed Handling contractor firm in associating itself with and abetting the illegal activities of unauthorised removal of steel materials is an action unbecoming of such a firm.'
2. In respect of the said memorandum, the petitioner No. 1 showed cause and stated in the letter dated 13th June, 1977 his association with the Govt. agencies as a contractor and the petitioner No. 1 thereafter stated, inter alia, as follows:
'Throughout the entire period of about 12 years, I have performed my contracts to the entire satisfaction of the authorities concerned and there has never been any occasion for any complaint against me. I have therefore received the statement of charges forwarded to me with a sense of pain and humiliation. I know that in 1975 or thereabout a case had been registered against Shri Avadesh Kumar Srivastava and some others with regard to alleged removal of steel from the workshop store of the Chittaranjan Locomotive Works in 1969-70. I got this information as this case became a subject-matter of general comment at Chittaranjan. I have not been a party to the said proceedings at all. So far as Shri Avadesh Kumar Srivastava is concerned, I had received a complaint from the officer in charge of the General Stores sometimes in Feb., 1971 to the effect that he was not a reliable person. Upon this complaint I removed him forthwith from all my contracts with the General Stores. Thereafter in April 1971 he left my service.
The allegations in the statement of charges that any wagons of steel were removed from Chittaranjan Locomotive Works and that a conspiracy was hatched for that purpose to which I was a party, is not only absolutely baseless but has also come to me as a shock. The statement itself in so far as itseeks to implicate me in the alleged conspiracy, is absolutely vague and without any particulars. It does not disclose any material or basis on which it has been alleged that I was a party to such conspiracy. In these circumstances it will in fact be impossible for any person to give any effective reply to the statement of charges except for totally repudiating the allegations that he was not a party to the conspiracy.
I may mention that in Aug., 1974 I had received a letter signed by Assistant Controller of Stores asking me to contact Fatehpur Police Station. Chittaranjan, in connection with Case No. RC/25/73 as per directive of one Shri Bacchi Deputy Superintendent of Police, C. B. I. When I went to the aforesaid police station, I was told that I had nothing to do with the case mentioned in the aforesaid letter of Assistant Controller of Stores.'
3. The petitioner in his said letter also referred to the decision of the Supreme Court in the case E. E. & C. Ltd. v. State of West Bengal, : 2SCR674 and asked for dropping the proceedings. The petitioner further stated as follows:--
'It is respectfully submitted that there is absolutely no basis on which any ban can be imposed against me. If in spite of what I have stated above, it is still decided to pursue the matter further, I shall request that full particulars of my alleged part in the conspiracy may be furnished to me so that I am in a position make an effective reply to the statement of charge. As stated above, the statement of charges does not impute any part to me except for making a bald statement that I was a party to the conspiracy. I further request that I may be furnished with copies of the various documents and/or statements of various witnesses on the basis of which I have been served with the aforesaid statement of charges. In the absence of access to and knowledge of the material on the basis of which the statement of charges has been made against me I am not in a position to file a reply to the same. I further request that in the event of the charge being persisted against me, I may also be given an opportunity to produce evidence and of an oral hearing to rebut any evidence that is used against me. The right to representation, as laid down by the SupremeCourt in the aforesaid case means an effective representation including the right to know the case on which the proposed action is based, the right to rebut the same and the right to oral hearing. Otherwise the right of representation will be merely illusory.' Upon this without any further hearing the impugned order as mentioned hereinbefore was passed. The said order has been challenged in this application under Article 226 of the Constitution and before me two grounds were pressed it was urged, firstly, that no reason had been indicated and secondly, it was submitted that the order in question had been passed in violation of the principles of natural justice. I have set out the memorandum of charges dated the 6th June, 1977 and also the impugned order banning any business dealings with the petitioner for five years. Now, in the order as such no reason has been given. It is indisputable that the order in question affects the petitioners' right to carry on business. Therefore, on this ground there cannot be any dispute. The order as such ex facie does not state any reason The Supreme Court in the case of M/s. Mahavir Jute Mills v. Shibban Lal, : (1975)IILLJ326SC has observed that administrative orders need not necessarily be speaking orders unless the statute specifically enjoined such a requirement. Orders which affect rights of the parties should contain reason. In this case as I have mentioned before, the order in question affects the rights of the petitioners. The order as such does not contain any reasons. But counsel on behalf of the respondent contended that if the order is read in the background of the memorandum of charges and the reply thereto by the petitioners, then the reasons for the order would be apparent. It is not possible to accept this contention. In the memorandum, as mentioned hereinbefore, the petitioners had been charged with several offences. It was mentioned that it had come to the notice that certain malpractices as mentioned in the memorandum of charges had been indulged in by the petitioner firm and the charges were that Shri H. S. Kohli, Proprietor of the Handling Contractors, who was in charge of the handling contract of Chittaranjan Locomotive Works during 1969-70, was very actively associated with the D. C. O. S. Shri Sewa Singh. Arising out of this friendship, aconspiracy was hatched according to the statement of charges, between the following persons during 1969-70 for the clandestine removal of steel materials from the Chittaranjan Locomotive Works. The persons named were: Shri Sewa Singh, D. C. O. S., Shri H. S. Kohli Proprietor of the petitioner firm, Shri Mulchand Agarwal, a businessman. Shri Sachindananda Singh, Ward Keeper and Shri R. N. Dey, Ward Keeper. It was further alleged that the conspiracy envisaged the removal of steel material by the petitioner to Shri Mulchand Agarwal, a businessman, making it appear that the removal of the material was genuine and authorised. To this end, it was further alleged, that one Shri Avadesh Kumar Srivastava, an employee of the petitioner had arranged a number of wagons for the removal of the materials and also prepared the bogus forwarding note in fictitious names of various parties. It was alleged that the acts mentioned in the said statement of charges led to the removal of a number of wagons of steel valuing over Rs. 2 lakhs and a loss was thus caused to the Railway Administration. To this, as mentioned hereinbefore, the petitioners had shown cause and given a total denial. It appears that certain police case had been instituted against others but the petitioners were not involved in such a case.
4. The petitioners further mentioned in their reply as follows:
'So far as Shri Avadesh Kumar Srivastava is concerned, I had received complaint from the officer in charge of the General Stores sometimes in Feb., 1971 to the effect that he was not a reliable person. Upon this complaint. J removed him forthwith from all my contracts with the General Stores. Thereafter, in April, 1971 he left my service.'
5. The statement to the aforesaid effect has not been denied by the respondent. It is not, therefore, apparent whether the said Srivastava was concerned with the conspiracy or whether the man, who had left the employment of the petitioner firm in 1969-70 could be responsible for stopping the Government contract of the petitioner in the year 1977. The basis upon which the impugned order was passed is not clear from the order in question even if the same is read in conjunction with the memorandum and the statement of charges.
6. Learned counsel on behalf of the respondent contended that when fraud was committed in the course of employee's employment and not outside the scope of his authority, the employer was liable. He drew my attention to the observations of the Court in the case of Lloyd v. Grace Smith & Co., 1912 AC 716. In my opinion, I am not concerned with the said question and it is not necessary for me to examine this contention. I am concerned with the question as to on what basis the order was passed or whether it was manifest from the order itself or it could be gathered from the surrounding circumstances. Such a reason I have not been able to find either from the order or from the memorandum of charges or the statements sent along with the memorandum read with the reply by the petitioner. It was stated in the affidavit-in-opposition filed on behalf of the respondent that there were certain other reasons but such reasons were not disclosed either to the Court or to the petitioners. The impugned order as I have already mentioned before, certainly affects the rights of the petitioner. In such a situation, the order must comply with the principles of natural justice and must be on reasons. In the case of E. E. & C. Ltd. v. State of West Bengal, : 2SCR674 the Supreme Court observed that blacklisting had the effect of preventing a person from the privilege and the advantage of entering into lawful relationship with the Government for purposes of gains. The fact that the disability was created by the order of blacklisting indicated that the relevant authority was to have an objective satisfaction. Fundamentals of fair-play required, according to the Supreme Court, that the person concerned should be given an opportunity to represent his case before he was put on the blacklist. Here, the petitioner No. 1 has in his representation asked for an opportunity of repudiating the evidence which has been used against the petitioner. Such opportunity was not given to the petitioner and no reason was indicated to the petitioner as to why such opportunity could not be given. The petitioner further asked that in order to make proper representation further particulars had to be given to the petitioner. It was stated that the petitioner was a party to the conspiracy and the petitioner therefore wanted to know the details of the documents orthe evidence on the basis of which the petitioner was charged to be a party to the conspiracy. It was not that all the details or all the information relating to the conspiracy were to be given to the petitioner but certainly certain information upon which the person, who is called upon to give his evidence that he was not involved in the conspiracy might be required. No such particulars were given and no reason was also given as to why such particulars could not be given to the petitioner.
7. In the premises, the order in question, in my opinion, is bad because it does not indicate any reason nor does it show that proper reasonable opportunity was afforded to the petitioner before passing the impugned order. I would, therefore, quash the said order dated 15th Feb., 1978 and the respondents are restrained from giving effect to the said order. This order, however, will not prevent the respondents from passing any fresh order on the existing charge-sheet after giving the petitioners reasonable opportunity in accordance with law.
8. The Rule is made absolute to the extent indicated above. There will be no order as to costs.