Non-Supply Of Enquiry Report Not Mere Procedural Irregularity When Authority Relies On It To Terminate Contract: Patna High Court
The Patna High Court has held that once the Food Corporation of India (FCI) relies on an enquiry report to terminate a contract and impose civil consequences, it must first furnish a copy of that report to the affected contractor. The Court held that denial of the report deprives the contractor of an effective opportunity to respond and violates the principles of natural justice. A Division...
The Patna High Court has held that once the Food Corporation of India (FCI) relies on an enquiry report to terminate a contract and impose civil consequences, it must first furnish a copy of that report to the affected contractor. The Court held that denial of the report deprives the contractor of an effective opportunity to respond and violates the principles of natural justice.
A Division Bench of Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Jha set aside an order terminating a handling and transportation contract, forfeiting the contractor's security deposit and debarring him from future tenders for two years.
The petitioner had challenged FCI's order dated December 26, 2025, by which his two-year contract was terminated with immediate effect. The order also directed that the remaining work be carried out through another contractor at the petitioner's risk and cost, forfeited his security deposit and debarred him from participating in FCI tenders for two years.
According to the petitioner, although FCI had issued several notices alleging inadequate deployment of labour, delays in unloading food grains and other operational lapses, he had responded to each notice. He explained that the delays were caused by factors such as poor approach roads, inadequate infrastructure at the godown, delayed opening of the storage facility and lack of prior information regarding the arrival of railway rakes. His principal grievance was that the show-cause notice referred to an enquiry report and stated that it was enclosed, but no copy of the report was ever supplied to him before the final order was passed.
FCI argued that the enquiry report was merely an internal fact-finding document and that the termination was based not only on the report but also on repeated contractual defaults by the petitioner.
The High Court found that the show-cause notice expressly relied on the enquiry report while proposing action against the contractor. It also noted that FCI failed to produce any material showing that a copy of the report had actually been supplied to the petitioner. The Bench held that once the authority chose to rely on the enquiry report, fairness required that the contractor be given a copy of it before any adverse decision was taken.
The Court observed that merely issuing show-cause notices could not substitute the requirement of supplying the material on which the authority proposed to rely. Without access to the enquiry report, the petitioner was deprived of a meaningful opportunity to dispute its findings or explain the circumstances recorded in it. The Court noted:
“In the present case, although the respondents have sought to contend that the enquiry report was only an internal document, the fact remains that the said report has been specifically referred to in the show cause notice and forms part of the material considered by the competent authority while passing the impugned order. Once such reliance has been placed upon the enquiry report, its non-supply cannot be treated as an inconsequential procedural irregularity. The petitioner was entitled to know the contents of the report so as to effectively answer the allegations before any adverse action affecting his contractual rights and civil consequences was taken against him.”
Relying on the Supreme Court's decision in Managing Director, ECIL v. B. Karunakar, the Bench reiterated that where an enquiry report forms the basis of a decision resulting in civil consequences, the affected person must receive a copy of that report before the final order is passed.
Holding that the non-supply of the enquiry report amounted to a violation of natural justice, the High Court set aside the impugned order and remitted the matter to the competent authority for fresh consideration in accordance with law.
Case Title: Ankush Agarwal v. The Food Corporation of India and Ors.
Case Number: Civil Writ Jurisdiction Case No. 4123 of 2026
Appearance: Mr. P.K. Shahi, Senior Advocate, with Mr. Sanjeet Kumar, Mr. Pranav Ranjan and Mr. Aditya Dev for the Petitioner; Mr. Sanjay Kumar for the Respondents; Mr. Brajesh Verma for FCI.