Introduction:

In a significant ruling, the Allahabad High Court has set aside orders issued by the Food Corporation of India (FCI) seeking the recovery of ₹17,16,767 from an empanelled advocate. The Court held that the recovery orders, based on an internal inquiry, violated the principles of natural justice as the petitioner was neither given a copy of the inquiry report nor allowed to defend himself. A division bench comprising Justice Shekhar B. Saraf and Justice Kshitij Shailendra ruled that the impugned orders were not only stigmatic but also deprived the advocate of the compensation for his services without due process.

Background of the Case:

The petitioner, Advocate Vijay Kumar Dixit, had been empanelled with the FCI for legal services from 2017 to 2020. In 2024, the FCI issued multiple orders demanding the recovery of ₹17,16,767, alleging that this amount had been paid to him in excess. The recovery orders were based on an inquiry conducted by an internal committee, but the petitioner was neither provided with a copy of the inquiry report nor given a prior show cause notice. The demand notices issued to him simply directed him to deposit the amount in the Corporation’s bank account, without offering any opportunity to contest the claims. The petitioner challenged the recovery orders before the Allahabad High Court, arguing that the process adopted by FCI was arbitrary and violative of his rights.

Petitioner’s Arguments:

The petitioner contended that the recovery orders were issued in blatant violation of the principles of natural justice. He argued that he was never served with the inquiry report and was not allowed to explain his position before the recovery orders were passed. He maintained that such an action was stigmatic and could have serious repercussions on his professional career, including potential termination from the empanelment list. The petitioner further asserted that the orders were passed without jurisdiction, as no law or contractual provision allowed FCI to recover alleged excess payments without following due process. Relying on judicial precedents, he argued that any order that adversely affects an individual’s rights must be passed only after affording a fair hearing.

Respondents’ Arguments:

The Food Corporation of India defended its actions by asserting that there was no legal requirement to provide the petitioner with a copy of the internal inquiry report. It was argued that the inquiry was purely an internal audit exercise and, therefore, did not require compliance with principles of natural justice. FCI further contended that a writ petition for the recovery of fees by an advocate was not maintainable. Instead, the petitioner should have pursued remedies available under civil law if he had any grievance. The respondents maintained that the recovery orders were legitimate and based on the findings of the committee.

Court’s Observations and Judgment:

The High Court categorically rejected the arguments of the FCI, holding that any order that casts a stigma upon an individual must be passed by due process. The Court observed that the petitioner was never given a chance to defend himself, nor was he provided with the inquiry report that formed the basis of the recovery orders. It emphasized that such a process is legally unsustainable. The bench noted:

“Upon considering the various facts and circumstances of the case, we are of the view that any order that is passed by an authority that has the flavour of stigma being cast upon a person is required to be carried out in a particular manner where there is a due process of law. Such a process of law requires the person against whom such stigma is being cast to be granted an opportunity to place their case. The person should also be provided a copy of the inquiry report, if any, and, thereafter, given a chance to submit their response to the same. The above ingredients are missing in the present case.”

The Court placed reliance on several landmark Supreme Court judgments, including Prithipal Singh vs. State of Punjab, State of Haryana vs. Jagdish Chander, and U.P. State Road Transport Corporation vs. Brijesh Kumar, all of which affirm that any order affecting an individual’s rights must comply with principles of natural justice. The High Court concluded that the present case was not one where an advocate had filed for recovery of fees but rather where he was challenging an unlawful recovery initiated against him. Accordingly, the impugned orders were quashed, with the Court directing the FCI to initiate a fresh inquiry, if necessary, while strictly adhering to the principles of natural justice.