JUDGMENT A.N. Varma, J. - By means of this petition, the petitioner, a partnership concern, has prayed for quashing of: - (i) A notice dated 17-5-78 issued to the petitioner on behalf of the Joint Director of Industries, Agra region, to show cause why the registration for the petitioner under Industries (Development and Regulation) Act, 1951 be not cancelled; (ii) Seizure of the stock of coal with the petitioner; and (iii) An order cancelling the petitioners quota/allocation of Railway wagons. 2. The material facts are as follows: - The petitioner concern carries on business of manufacturing glasswares. It owns and operates a Glass Factory at Tundla in the district of Agra. The petitioner is registered as an Industrial Undertaking under Section 10 of the Industries (Development and Regulation) Act, 1951 with the Director of Industries, Uttar Pradesh. 3. For the purpose of carrynig on its business, the petitioner concern and owners of other Industrial Undertakings engaged in the business of manufacture of glasswares procure coal from various places in West Bengal. Coal is brought in Railway wagons to the places where the factories of the Industrial Units engaged in the manufacture of glasswares are situate. 4. Exercising powers under Section 2 of the aforesaid Act, the Central Government has declared Glass as a Scheduled Industry, which implies that the Glass Industry has been brought under the direct control of the Union Government. From the affidavits exchanged between the parties, the following position appears to be undisputed: - The petitioner as well as other Industrial Undertaking which are included in Sch. T of the aforesaid Act get priority in the allocation of Railway wagons for transporting coal, which is an essential commodity in the production of glasswares, Indeed in the counter-affidavit filed on behalf of Director of Rail (Movements) (respondent No. 1), it is stated that the Railway Administration is, under statutory directions issued by the Railway Board under Section 27-A of the Railways Act, obliged to give special facilities and preference to the transport of goods which are in the Preferential Tariff Schedule under priority 'C'. Coal admittedly falls in that Schedule. Coal admittedly falls in that Schedule. It is further undisputed that there is acute shortage of Railway wagons, as a consequence of which, the Director of Industries of each State has been enjoined the duty under Section 6 (4) read with Section 18-G (b) of the aforesaid Act as well as the provisions of II Sch. to the aforesaid Act to regulate and sponsor allocation of Railway wagons to the Industrial Undertakings belonging to a Schedule Industry, The Director of Rail (Movements) places at the disposal of Director of Industries of each State or allocation to Industrial Units Railway wagons in accordance with the exigencies of the economy and requirements of a particular Scheduled Industry. The Director of Industries as the sponsoring authority invites applications for allocation of wagons for transport of raw materials necessary for Industrial production by various Industrial Units and after taking into account their requirements and availability of wagons, the Director of Industries makes recommendations to the Railway administration for allocation of wagpns to the Industrial Units. The Railway Administration thereupon releases wagons in accordance with the recommendation of the Director of Industries. 5. In accordance with the above scheme, the petitioner was allotted by the Director of Industries Raw Material Section, Kanpur a quota of 126 wagons for the year 1978, 6. Since the scheduled Industries are granted high priority in the allocation of wagons, the Director of Industries, as the sponsoring authority, has naturally to keep a strict watch over the proper utilisation of the material transported by means of Railway wagons. At specified intervals, a team of officers inspects Industrial Units for the above purpose. It was in this connection that a team of officers described as Inspecting Panel visited the petitioners factory on 6-5-78 and submitted a report to the Director of Industries, a true copy of which has in been annexed to the counter-affidavit of Sri Alamdar Hussain. 7. The Inspecting Panel found that the petitioners Industrial Unit had been lying closed since the year 1975. It further found that the petitioner had sold about 185 tons of coal - which was described by the petitioner as coal dust - without getting any verification done by the appropriate authority. In the view of the Inspecting Panel, the petitioner had clearly misutilised the coal supplied to him on a priority basis. It further found that the petitioner had sold about 185 tons of coal - which was described by the petitioner as coal dust - without getting any verification done by the appropriate authority. In the view of the Inspecting Panel, the petitioner had clearly misutilised the coal supplied to him on a priority basis. It, therefore, recommended that the allocation of wagons to the petitioner should be cancelled, and that the existing stock of coal with the petitioner should be seized. It appears that on the basis of the above report, the Director of Industries recommended to the Director of Rail (Movements) to cancel the petitioners quota of wagons. The Director of Rail (Movements) in his turn passed an order on 2-6-78 cancelling the quota of the petitioner with immediate effect (vide Annexure "14" filed with an affidavit annexed to the petitioners application dated 3-8-78). It further appears that the petitioner was served with a notice dated 17-5-78 (Annexure 8' to the writ petition) to show cause why the petitioners registration should not be cancelled in view of the fact that the petitioners unit had been lying idle since the year 1975. As a result of the report of the Inspecting Panel, the petitioners stock of coal was also seized under Cl. 13 (1) (c) of the U. P. Coal Control Order 1975 by the Research Chemist (Glass) Firozabad, who is also the coal controller under the U. P. Coal Control Order 1977 (vide Annexure "10" to the writ petition). 8. The petitioner has challenged the aforesaid orders and notice by means of this petition. 9. We will first take up the submission of the learned counsel for the petitioner with regard to the above mentioned notice issued to the petitioner to show cause why its registration should not be cancelled. Learned counsel for the petitioner submitted that this notice is without jurisdiction inasmuch as it is based upon grounds which could not entitle the authorities to cancel the petitioners registration under Sec. 10-A of the Industries (Development and Regulation) Act, 1951. Learned counsel further submitted that the petitioners registration could only be cancelled by the Central Government and not by the authority which has issued the said notice. The next submission of the petitioners in this connection was that the notice had been issued on account of vindictiveness and mala fides of the respondents. 10. Learned counsel further submitted that the petitioners registration could only be cancelled by the Central Government and not by the authority which has issued the said notice. The next submission of the petitioners in this connection was that the notice had been issued on account of vindictiveness and mala fides of the respondents. 10. Having heard learned counsel for the parties, we are clearly of the view that the challenge to the notice to show cause why the petitioners registration should not be cancelled, is totally without any substance. 11. The notice which is Annexure 8' to the writ petition states that inasmuch as the petitioners unit had been lying closed since the year 1975, and that no production has been going on in the said unit since that time, the petitioners registration was liable to be revoked. The petitioner has admitted in Annexure 9 to the writ petition, which is a reply to the said notice on behalf of the petitioner that its Unit had in fact been lying closed since the year 1975 on account of losses and paucity of finance, besides other reasons. 12. Section 10-A of the aforesaid Act reads : - "10-A. Revocation of Registration in certain cases - If the Central Govt, is satisfied that the registration of any Industrial Undertaking has been obtained by misrepresentation as to an essential fact or that any Industrial Undertaking has been ceased to be registrable under this Act by reason of any exemption granted under this Act becoming applicable thereto or that for any other reason, the registration has become useless or ineffective and therefore requires to be revoked, the Central Government may after giving an opportunity to the owner of the undertaking to be heard, revoke the registration." It is clear from the aforesaid provisions that the registration of an Industrial Undertaking can be revoked if the registration has become useless or ineffective. We are clearly of the view that the ground upon which the registration of the petitioners undertaking is sought to be revoked is covered by the provisions of Section 10-A of the aforesaid Act inasmuch as if the petitioners undertaking was in fact lying closed and no production was going on for the period mentioned in the said notice, its registration had clearly become useless or ineffective. In any case, we are not required to give a concluded finding whether the registration of the petitioners Undertaking had become useless or ineffective, inasmuch as the petitioner has been served only with a notice to show cause, and it is for the concerned authority to decide whether the registration of the petitioner is liable to be revoked. It is admitted by the petitioner that in point of fact, its registration has not yet been revoked and no action has been taken in that behalf after the petitioner submitted his reply referred to hereinabove. We are satisfied that on the ground stated in the notice dated 17-5-78 mentioned above, the authority did have the power to issue the notice to the petitioner and consequently the notice cannot be quashed. 13. The next ground upon which the aforesaid notice was challenged is that the authority which has issued the said notice, namely, the Assistant Director of Industries had no power to revoke the petitioners registration. The notice is signed by Sri B. N. Kulshreshttha, the Assistant Director of Industries for the Joint Director of Industries, Agra Region, Agra. It has not been averred in the writ petition that the Joint Director of Industries was not authorised to issue that notice. If such an averment had been made, the respondents would have had the opportunity to place before the Court the authorisation in favour of the officer on whose behalf the notice had been issued. We find that under Sec. 25 of the Industries (Development and Regulation) Act, 1951 the Central Government is empowered to delegate any of its power (other than those given under Sections 16 and 18-A of the aforesaid Act) to any officer or authority. Under the circumstances, it is not possible to hold that the officer on whose behalf the notice has been issued, did not have the power to issue the notice. 14. Coming to the ground of mala fides on which the aforesaid notice has been challenged, we have perused the allegations made in the petition as well as in the counter affidavit and rejoinder affidavit. We are clearly of the view that the petitioner has totally failed to substantiate the ground of mala fides alleged against the authorities. 14. Coming to the ground of mala fides on which the aforesaid notice has been challenged, we have perused the allegations made in the petition as well as in the counter affidavit and rejoinder affidavit. We are clearly of the view that the petitioner has totally failed to substantiate the ground of mala fides alleged against the authorities. Learned counsel for the petitioner sought to support the ground of mala fides on the basis of allegations made in the writ petition regarding the sale by the petitioner of what it described as 'coal dust. It is alleged in the petition that the petitioner had filed a writ petition in this Court being Civil Misc. Writ No. 3831 of 1978 in which on the stay application, the following order was passed : - "List on 8-5-1978 for admission. The Standing Counsel may file counter affidavit within this period. Meanwhile, the petitioner may approach the Assistant Glass Technologist for permission to sell coal dust. The Assistant Glass Technologist, if approached by the petitioner, shall inspect the coal dust and permit sale if the sale transaction is found in order and in accordance with law." It is alleged in the petition that the petitioner approached the Research Chemist in pursuance of the aforesaid interim order on 29-4-78 and asked him to grant permission, inasmuch as according to allegation of the petitioner, the said officer had already inspected the 'coal dust on 28-4-1978. It is alleged that the said officer refused to give the permission as he wanted illegal gratification from the petitioner. It is then alleged in the writ petition that inasmuch as the Research Chemist (Assistant Glass Technologist) failed to grant the permission as directed by this Court, the petitioner was left with no option but to sell the 'coal dust. These allegations have been denied in the counter affidavit of Alamdar Hussain filed on behalf of the respondents. In the counter affidavit, it has been clearly and emphatically asserted that the Research Chemist (Assistant Glass Technologist) had not made any inspection on 28-4-78, that the petitioner had not produced any stay order as alleged by him, and that the allegation about demand of illegal gratification was totally false. In the counter affidavit, it has been clearly and emphatically asserted that the Research Chemist (Assistant Glass Technologist) had not made any inspection on 28-4-78, that the petitioner had not produced any stay order as alleged by him, and that the allegation about demand of illegal gratification was totally false. It has also been mentioned in the counter affidavit that on 28-4-78, when the respondent No. 4 is alleged to have inspected the petitioners unit, the respondent No. 4 was present in Allahabad in the office of the Standing Counsel, and consequently, the allegation that such an inspection was made by the said respondent No. 4 was false. Having perused the various affidavits, we are inclined to believe the version of respondents in this connection, and we hold that the allegations of mala fides against the respondents Nos. 4 and 8 are totally baseless. The petitioner has thus totally failed to prove that the above notice is without jurisdiction or is vitiated by mala fides. We are of the view that the notice has been issued within the undoubted jurisdiction and power of the authority which has issued it, and that it has been issued in due course, and not out of any vindictiveness. 15. We may next take up the challenge to the order passed by respondent No. 4 seizing stock of coal with the petitioner (vide Annexure "10" to the writ petition). This order was challenged by the petitioner on the ground that there was no power in the authorities to seize the stock of coal with the petitioner. Having heard learned counsel for the parties, we are of the opinion that the order seizing the stock of coal is clearly covered by the provisions of U. P. Coal Control Order. The order has been passed purportedly under Cl. 13 (1) (c) of the U. P. Coal Control Order. The said order refers to the report of the Inspecting Panel dated 6-5-78 and states that the said Panel found shortage in the stock of coal. We have already referred to the substance of the said report hereinabove, and it is not necessary to repeat the same. Cl. 13 (1) (c) of the U. P. Coal Control Order reads as follows : - "The State Coal Controller or Licensing Authority or any Inspector may, with a view to secure compliance with this order : - (a) to (b)..................... Cl. 13 (1) (c) of the U. P. Coal Control Order reads as follows : - "The State Coal Controller or Licensing Authority or any Inspector may, with a view to secure compliance with this order : - (a) to (b)..................... (c) seize coal found in possession of any person ..................... in respect of which he has reason to believe that contravention of this Order has been or is being or is about to be committed " According to the report of the Inspecting Panel, there was shortage in the stock of coal, when physical verification was done with the register maintained by the petitioner. It was also reported by the panel, and, indeed admitted by the petitioner that 'coal dust had been sold by the petitioner without any verification. It is also pertinent to mention here that in the definition of "coal" as given in U. P. Coal Control Order 'coal dust is also included. The inference in the opinion of the authorities from these facts, obviously was that the shortage in coal had resulted, as a direct consequence from the disposal of coal by the petitioner for purposes other than industrial consumption. It was, therefore, not unreasonable on the part of the respondents to infer that the coal which had been imported for industrial consumption by the petitioner had either been sold or otherwise disposed of in contravention of the U. P. Coal Control Order 1977, and that the petitioner was functioning as a dealer within the meaning of the aforesaid order without having obtained a licence, which act was clearly a breach of Cl, 4 of the U. P. Coal Control Order. Under the circumstances, the authorities concerned were within their rights in seizing the stock of coal, and we are not satisfied that there any illegality was committed in seizing the stock of coal. Learned counsel for the petitioner tried to submit that the sale of "coal dust" by the petitioner was justified or that it could not be taken into consideration in the exercise of power under Cl. 13 (1) (c) of the aforesaid Act. Learned counsel for the petitioner contended that the petitioner was free to dispose of 'coal dust. Learned counsel for the petitioner tried to submit that the sale of "coal dust" by the petitioner was justified or that it could not be taken into consideration in the exercise of power under Cl. 13 (1) (c) of the aforesaid Act. Learned counsel for the petitioner contended that the petitioner was free to dispose of 'coal dust. We do not agree 'coal dust being 'coal within the meaning of the aforesaid order, the authorities were justified in taking into account the disposal of 'coal dust and the consequent shortage of 'coal found by the Inspecting Panel. As regards the attempt of the petitioner to justify the disposal of coal stock, we are of the opinion that it is entirely irrelevant for the scope of present inquiry to go into the question whether the petitioner was justified in disposing of 'coal dust. We are only concerned with the validity of the order seizing the stock of coal. On the facts and in the circumstances of the present case, we are satisfied that the impugned order seizing the coal was passed clearly within the four corners of the provisions of Cl. 13 (1) (c) of the U. P. Coal Control Order, and that it was neither illegal nor arbitrary. 16. There remains now for our consideration the challenge to the order passed by the Director of Rail Movement cancelling the petitioners quota of wagons. Learned counsel for the petitioner vehemently argued that the said order adversely affected valuable rights of the petitioner resulting in deprivation of the right to get the wagons on a high priority basis, and that being so, argued learned counsel for the petitioner, the authorities could not cancel the petitioners quota without giving it an opportunity to show cause and a hearing against the proposed cancellation of the quota. 17. Learned counsel for the respondents on the other hand urged that the allocation of Railway wagons was a mere privilege not resulting, in any rights accruing to the petitioner, and consequently, the petitioner was not entitled to any hearing or show cause notice. It was not denied in the counter affidavit filed on behalf of the respondents that in point of fact the petitioner was given no opportunity to show cause before his quota of wagons was cancelled. 18. It was not denied in the counter affidavit filed on behalf of the respondents that in point of fact the petitioner was given no opportunity to show cause before his quota of wagons was cancelled. 18. Having heard learned counsel for the parties, we are inclined to agree with the submissions of the learned counsel for the petitioner. We are of opinion that the petitioners were entitled to be heard before their allocation/quota of wagons was cancelled. 19. We have set out in the beginning of our judgment the facts which clearly imply both the Director of Industries, under the provisions of the Industries (Development & Regulation) Act referred hereinabove, and, the Director of Rail (Movements) under the provisions of Section 27-A and other provisions of the Railways Act, were bound under the law to provide facilities, subject to availability of raw material and Railway wagons to those engaged in the business of scheduled industry. It is not denied that glasswares industry is a scheduled industry, the power to allocate Railway wagons is therefore not an arbitrary and uncanalized power but a power which has to be exercised reasonably, and in public interest. The said power clearly imposes on the authorities a duty to act always in public interest, and in fair and proper manner being the exercise of a statutory duty. 20. It has been averred in para. 36 of the writ petition that the charges of Railway wagons released on the basis of priority recommended by the sponsoring authority are nearly two-thirds less than those for a wagon booked without any sponsoring by the Director of Industries. It is further averred that the Railway wagons released on the recommendation of the sponsoring authority, also reach Industrial units quickly and much earlier than otherwise. There is an indication that there is a separate "Preferential Tariff Schedule" for goods transported through wagons in regard to the requirements of a scheduled industry. These facts, in our opinion (sic) sufficient interest and rights in the petitioner and other Undertakings engaged in the scheduled industry to warrant a conclusion that these interests and rights could not be taken away without complying with the principles of natural justice. The order cancelling the quota of the petitioner resulted in affecting pre-judicially the aforesaid benefits, rights and interest of the petitioner. It resulted in serious consequences and loss of substantial benefit to the petitioner. The order cancelling the quota of the petitioner resulted in affecting pre-judicially the aforesaid benefits, rights and interest of the petitioner. It resulted in serious consequences and loss of substantial benefit to the petitioner. The impugned action cancelling the petitioners quota has certainly adversely affected the industrial activity in which the petitioner was engaged. In Joseph Vilangandan v. Executive Engineer reported in (1978) 3 SCC 36 : ( AIR 1978 SC 930 ) their Lordships of the Supreme Court reiterated their view expressed in an earlier decision reported in (1975) 1 SCC 70 : ( AIR 1975 SC 266 ) and held that black listing of a contractor has the effect of preventing him from the privilege and advantage of entering into lawful relationship with the Government for the purpose of gain and, that consequently, fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the black-list. Their Lordships of the Supreme Court held that an order which has the effect of visiting a person with civil consequences must comply with the principles of natural justice. In the aforesaid cases also the argument on behalf of the State was that no one has a fundamental right to insist that the Government must enter into a contract with him, and that consequently a person who is deprived of the prospects of entering into a contract with the Government by virtue of being black-listed was not entitled to any hearing, and further that the principles of natural justice were not attracted in such circumstances. Their Lordships of the Supreme Court repelled that argument and held as above. The present case stands on a stronger footing. Here also the petitioner was going to be deprived of the benefit and advantage of high priority granted to him under the aforesaid scheme. We are of the opinion that the ratio in the aforesaid cases fully covers the present situation. We are clearly of the view that before depriving the petitioner of the quota, he was entitled to be heard. Under the circumstances, we hold that the principles of natural justice have been violated in the present case by not giving to the petitioner the opportunity to show cause why their allocation of wagons be not cancelled. In the result, the writ petition succeeds and is allowed in part. Under the circumstances, we hold that the principles of natural justice have been violated in the present case by not giving to the petitioner the opportunity to show cause why their allocation of wagons be not cancelled. In the result, the writ petition succeeds and is allowed in part. The order of Director of Rail Movements dated 2-6-78 cancelling the quota of the petitioner is quashed. We, however, make it clear that it would be open to the Director of Industries or any other officer who might be empowered to act on his behalf to pass a fresh order recommending cancellation of allocation of Railway wagons in favour of the petitioner after giving the petitioner an opportunity of showing cause against the proposed action. In all other respects, the writ petition fails and is dismissed. In view of the divided success and failure of the parties, they will bear their own costs.