What was the main legal principle in this case?

The Court stressed natural justice, especially the right to a fair hearing (audi alteram partem), before actions that affect rights.

Why was the tender termination set aside?

The Managing Director ended the agreement without notice or hearing. This caused real prejudice, so the order could not stand.

Did the Court discuss proportionality?

Yes. The action must fit the goal; harsh steps without fair process are not proportionate.

Is a breach of natural justice always fatal?

Not always. The Court looks for actual or likely prejudice. Here, prejudice was clear.

Was this a public law matter?

Yes. Though a contract was involved, public elements allowed review under public law principles.

State of U.P. v. Sudhir Kumar and Ors

State of U.P. v. Sudhir Kumar and Ors. (2020)

Easy English case explainer on natural justice, ex parte enquiry, proportionality, and public vs private law control over tenders.

Supreme Court of India 2020 Bench: SC Citation: 2020 SC Natural Justice ≈ 5 min read

Quick Summary

The case is about fair hearing in government-related contracts. After a tender process and a signed two-year agreement, the Managing Director (MD) ended the contract without notice, based on complaints. The High Court set aside that action. The Supreme Court agreed. The Court said: you must hear the affected party; actions must be proportionate; and when public elements are present, public law controls apply. Because the bidder was kept in the dark and suffered real prejudice, the termination could not stand.

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Issues

Was the MD’s ex parte enquiry a breach of natural justice?
Could the MD cancel the agreement after a year without giving notice or hearing?

Rules

Audi Alteram Partem

Before taking a step that harms someone’s rights, give them a fair chance to be heard.

No Prejudice

Breach of natural justice matters when it causes real or likely prejudice, proved by facts or clear inference.

Proportionality

The action must fit the purpose; harsh steps without fair process are excessive.

Public Law Angle

Where public elements exist, courts apply public law standards even if a contract is involved.

Facts (Timeline)

Timeline graphic for the tender and cancellation sequence

U.P. State Warehousing Corporation issued an e-tender; it was cancelled for “administrative reasons”.

A second e-tender was issued on the same terms; qualified price bids were opened.

The MD cancelled this tender, calling it “impractical”, and reissued a tender with the same capacity and value.

Sudhir Kumar Singh (R-1) won the Bhawanipur centre. Work started under a two-year agreement and continued for over a year.

Complaints were made to the State’s Principal Secretary about alleged irregularities in the e-tender.

The MD held an ex parte enquiry and looked into cancelling the earlier tender without hearing R-1.

R-1 filed a writ in the Allahabad High Court against the termination after over a year of performance.

High Court set aside the MD’s action, mainly for breach of natural justice. Supreme Court upheld that view.

Arguments

Appellant (State/Corporation)

Administrative discretion allowed re-tendering and termination.
Complaints indicated irregularities; urgent action was justified.
Public interest required cancelling a flawed process.

Respondent (Sudhir Kumar Singh)

No notice, no hearing—clear breach of natural justice.
Contract was already in force and partly performed.
Ex parte process caused real prejudice and unfair termination.

Judgment

The Supreme Court upheld the High Court’s decision. The MD ended the agreement without giving the bidder any opportunity to be heard. The tender stage had closed and a valid agreement existed. The process created actual prejudice against the bidder. Therefore, the termination order could not survive.

Ratio

Natural justice is flexible, but denial of a hearing that leads to real prejudice is fatal.
Breach alone is not enough; courts look for actual or clearly likely prejudice.
Public law standards, including proportionality, apply when public elements exist even in contractual settings.

Why It Matters

Government bodies cannot short-circuit fairness. Once a contract is awarded and work is underway, any move to cancel must follow due process. This case guides administrators: act fairly, act proportionately, and give notice and hearing before you act.

Key Takeaways

Always issue notice and allow a hearing.

Match the action to the aim—be proportionate.

Show real or likely prejudice to succeed on natural justice claims.

Public law review can reach contractual actions with public elements.

Mnemonic + 3-Step Hook

Mnemonic: “HAP-P” — Hearing → Actual Prejudice → Proportionality → Public law.

Ask: Was the person heard?
Assess: Is there real prejudice?
Align: Is the action proportionate and within public law limits?

IRAC Outline

Issue

Was the ex parte enquiry and termination without notice a breach of natural justice?

Rule

Audi alteram partem; no prejudice principle; proportionality; public law review of actions with public element.

Application

No hearing was offered; the agreement had been running; the bidder faced real prejudice from a sudden, ex parte cancellation.

Conclusion

Termination invalid; High Court’s order restored; natural justice reaffirmed.

Glossary

Ex parte enquiry: A one-sided process where only one party is heard.
Audi alteram partem: “Hear the other side” — a core rule of natural justice.
Proportionality: Action should not be more severe than needed to achieve the goal.
Prejudice: Real harm or a clear likelihood of harm due to unfair procedure.