JUDGMENT In this application under Article 226 of the Constitution of India the petitioners have challenged the competence, jurisdiction and authority of the Respondents to suspend the supply of transformer oil base stock (hereinafter referred to as the TOFS) by the Indian Oil Corporation Limited. The case of the petitioners is stated hereinafter. 2. The Petitioner No. 1, Bharat Industrial Corporation is a registered partnership firm carrying on business of manufacture of transformer oil. The petitioner No. 2 is a partner of the petitioner No. 1. On 9th November, 1981 the Indian Standard Institution granted the petitioner firm a licence for the use of standard mark being Licence No. CM/L 1007524 under the Indian Standard Institution (Certification Mark) Act, 1952 in respect of new insulating oil for transformers and switchgear. The petitioner firm is also registered as a small scale unit under the Nation Small Industries Corporation Limited eligible for participation on the Central Government Store Purchase Programme as per the revised single point registration scheme for transformer oil having specifications ISI. 335-1973. The petitioner firm is also registered as a small scale industrial unit with the Directorate of Industries, Government of Assam for manufacturing and/or processing the refined wax (paraffin was from slack wax), petroleum gelly and transformer oil. 3. For the purpose of obtaining the supply of TOFS the petitioners by a letter dated 17th May, 1978 requested Indian Oil Corporation Ltd. the Respondent No. 1 (hereinafter referred to as IOC) to intimate the terms and conditions for supply of 100 M.T. of TOFS per month for manufacture of transformer oil. 4. By a letter dated 9th June, 1978 the Deputy Director, (Marketing), Director of Industries, Assam requested IOC to arrange to allot 100 M.T. of base stock for transformer oil to the petitioner firm per month for manufacture of transformer oil at the factory. By the said letter IOC was also requested that the material should be released on receipt of further clearance from the Director of Industries which would be issued as soon as the unit is fully equipped for going into production. 5. By the said letter IOC was also requested that the material should be released on receipt of further clearance from the Director of Industries which would be issued as soon as the unit is fully equipped for going into production. 5. By a letter dated 24th July, 1978 the Director of Industries, Assam intimated IOC that the petitioner firm had already placed orders for complete plant and machinery for manufacture of transformer oil, of the machinery ordered, a part of the equipment had already arrived at the factory premises at Gauhati and the installation of machinery was in progress. In the circumstances, the Director at Industries requested IOC to arrange for allotment of 100 M.T. of base stock for manufacturing of transformer oil per month to the petitioner firm. Ii was also pointed out in the said letter if there be any delay in allotment it was likely that the plant and equipment to be installed in the meantime would remain idle. 6. By a letter dated 3rd August, 1978 the Regional Sales Manager of IOC intimated the petitioner firm that before consideration for release of the TOFS certain conditions were to be fulfilled which were enumerated in the said letter dated 3rd August, 1978. In reply to the said letter dated 3rd August, 1978 the petitioner firm by a letter dated 11th August, 1978 informed the IOC that most of the conditions stated in the said letter have already been fulfilled and the remaining conditions would be fulfilled before the sale of the finished products. 7. Thereafter, by another letter dated 21st August, 1978 the Manager, Lube Planning, Indian Oil Corporation Limited, intimated the petitioner firm that certain conditions were to be initially fulfilled before the base oil for manufacture of transformer oil could be released. For the petitioner firm's guidance certain conditions have been enumerated in the said letter dated 21st August, 1978. It was also provided in the said letter that upon fulfilment of the conditions mentioned therein the petitioner firm should contact the Eastern Regional Office of the IOC for further necessary action. 8. By a latter dated 15th December, 1978 the petitioner firm informed the Regional Sales Manager of IOC that all the necessary formalities as mentioned in the said letter dated 3rd August, 1978 had been completed and the said authority should send technical representative to inspect the facility and to assess the capacity. 8. By a latter dated 15th December, 1978 the petitioner firm informed the Regional Sales Manager of IOC that all the necessary formalities as mentioned in the said letter dated 3rd August, 1978 had been completed and the said authority should send technical representative to inspect the facility and to assess the capacity. Therefore IOC by his letter dated 3rd July, 1979 requested the petitioner firm to confirm that it would sale the produce only to genuine transformer oil user and should also provide both to the Gauhati Divisional Office and Regional Office of IOC a monthly utilisation report indicating the stock in hand, the quantity purchased during the month and the quantity utilised for making transformer oil, balance stock at the end of the month, process loss and the names of the customers to whom transformer oil had been sold during the month. By the said letter the petitioner firm was also informed chat 10 M.T. of TOFS would be released on ad hoc basis to enable the petitioner firm to obtain the Indian standard Institution specification immediately after confirmation or clarification on the points asked for were received. The petitioner's were also intimated that the transformer oil manufactured by the petitioners against the ad hoc release of 10 M.T. should not be released to the market until ISI certification for the trial quantity is obtained. 9. By a letter dated 16th July, 1979 the petitioner duly confirmed the conditions which were put forward by IOC in the said letter dated 3rd July, 1979. By a letter dated 16th July, 1979 the General Manager, District Industries Centre, Kamrup confirmed to the Regional Sales Manager, the Respondent No. 2 that the petitioner firm was having valid registration for manufacture of transformer oil. 10. On or about 13th August, 1979 the petitioner firm received a letter dated 8th August, 1979 issued by the Regional Sales Manager informing that 10 K.L. of TOFS have been allotted purely on ad hoc basis so that material could be used for manufacture of transformer oil of ISI specification and it would not be diverted for any other use or re-sold. The petitioner firm was asked to confirm that the transformer oil manufactured would not be released in the market until ISI certificate was obtained for trial quantity and on receipt of ISI certificate the petitioner No. 1 was requested to inform the said authority for further action. 11. By the said letter the petitioner firm was directed to submit monthly utilisations report indicating stock in hand quantity utilised for making transformer oil, process loss etc. to the Divisional Office at Gauhati as well as Calcutta Office of the I.O.C. at the same time the petitioners were directed to place order with the Gauhati Office of the IOC for the trial quantity of 10 K.L. at the rate of Rs. 4117 14 per K.L. to be supplied ex. Calcutta in builk exclusive of sales tax and other charges as applicable; and the supply would be made as per availability. The petitioner firm states that on the basis of the said letter an order was placed for supply of 10 K.L. of TOFS and the IOC from its Calcutta Office issued delivery order on 5th September, 1979. 12. By a letter dated 16th April, 1980 the petitioner firm intimated the Respondent No. 3 that on account of political disturbances in Assam the delivery order issued for 10 K.L. Ad hoc quantity TOFS could not be lifted and therefore the delivery order should be revalidated suitably. By the said letter the said Respondent was also intimated that petitioner firm have already obtained CT-2 certificate for getting supplies of TOFS at a concessional rate of excise duty. 13. It is alleged by the petitioners that on receipt of 10 K.L TOFS on ad hoc basis the petitioner firm started production of transformer oil at the factory at Gauhati sometime in the year 1981. It is also disputed that the petitioners said factory is set up with all modern machinery and equipment worth about 10 lakhs with a daily production capacity of 5 tons of transformer Oil. The petitioner firm allegedly employed required number of labourers and office staff and is paying salary to the tune of Rs. 15,000/- per month. The petitioner firm also categorically stated that at no point of time the petitioners ever violated any of the conditions put forward by the IOC or any of its officers and/or representatives. The petitioner firm allegedly employed required number of labourers and office staff and is paying salary to the tune of Rs. 15,000/- per month. The petitioner firm also categorically stated that at no point of time the petitioners ever violated any of the conditions put forward by the IOC or any of its officers and/or representatives. The petitioner firm was having regular supply of TOFS from the IOC as per the petitioner firm's requirement and on the basis of delivery orders issued by the said authority until the time hereinafter mentioned. 14. It is further alleged that after starting regular production of transformer Oil the IOC raised the ad hoc allocation of TOFS from 10 K.L. to 20 K.L. and as the petitioners received several orders from the Defence Factories and other customers and such deliveries were to be completed before 31st January, 1982, the petitioner by a letter dated 5th January, 1982 requested the Respondent No. 2 to give an ad hoc allocation of 50 K.L. TOFS immediately for fulfilment of the contracts. Similarly another letter dated 21st September, 1982 the petitioner firm requested the Divisional Manager of the IOC to supply 100 K.L. TOFS to enable the petitioner firm to supply transformer oil to the Railways against DGS & D running contract. It is alleged that the IOC regularly supplied TOFS as per the petitioner firm's requirements subject to availability and such basic raw material was supplied from the godown of the IOC at Calcutta. 15. It is further alleged that sometime at the end of September, 1932 the Gauhati Office of the IOC refused to supply regularly the basic raw material for manufacture of transformer oil as Sri Ahuja of Gauhati Office intimated the petitioner No. 2 that certain clarifications from the Calcutta Office of the IOC were needed before issue of any further delivery orders. In the circumstances the petitioner firm by a letter dated 23rd September, 1982 intimated the Respondent No. 3 all the facts and further requested to advise Gauhati Office to issue delivery order for a minimum of 100 K.L. TOFS on ad hoc basis pending finalization of regular capacity. 16. In the circumstances the petitioner firm by a letter dated 23rd September, 1982 intimated the Respondent No. 3 all the facts and further requested to advise Gauhati Office to issue delivery order for a minimum of 100 K.L. TOFS on ad hoc basis pending finalization of regular capacity. 16. On or about 22nd August, 1983 the petitioner firm received a letter form the Respondent No. 4 where the petitioners were requested to intimate whether the Tank Trucks which lifted the various consignments of TOFS during February, 1982 to January, 1983 from IOC Calcutta had delivered the products in petitioners Factory at Gauhati. In case, the service of the transport contractors were utilised for carrying on the product the petitioner were requested to inform the address of the transporters as well as the detailed particulars of consignments i.e., challan, and date on which they had carried the products on the petitioner's behalf. By a letter dated 22nd August, 1983 the petitioners supplied all the information’s asked for by the Respondent No. 4. 17. Therefore, by another letter dated 29th August, 1983 the Respondent No. 4 again requested the petitioner firm to furnish immediately the particulars of the lorry numbers as well as the owner of those lorries including the names of the lorry numbers as well as the owner of those lorries including the names of the transport contractors if any by which the products were carried to Gauhati and the dates on which the lorries left Calcutta as well as arrived at Gauhati with TOFS. 18. In reply to the said letter dated 29th August, 1983 the petitioner firm by a letter dated 2nd September, 1983 supplied all the particulars. By the said letter the petitioner film intimated that on account of certain genuine problems the petitioners had to send TOFS to Gauhati in drums. Firstly, empty drums were not available in Gauhati and if the emplty drums were sent from Calcutta to Gauhati the cost would become exorbitant. Secondly, there was no regular tank truck service for transportation of oil from Calcutta to Gauhati and since no block load was available the freight, would become exorbitant. Hence only suitable and economical way was to get the oil filled in drums and then send the same to Gauhati. Secondly, there was no regular tank truck service for transportation of oil from Calcutta to Gauhati and since no block load was available the freight, would become exorbitant. Hence only suitable and economical way was to get the oil filled in drums and then send the same to Gauhati. The petitioner firm further stated that as the petitioners held L-6 licence under Central Excise & Salt Act, 1944 TOFS was supplied the petitioners at a concessional rate of excise duty. According to excise Rules immediately on arrival of raw material at Gauhati the Excise. Authorities were informed and the Inspectors of Central Excise inspected the goods and verified the same. The petitioner firm in due compliance sent challan numbers, dates, quantities of raw materials, number of Tank Truck, lorry numbers and names of transformer parties for the period February, 1982 to January, 1983. 19. On or about 5th September, 1983 the petitioner firm received a letter dated 2nd September, 1983 issued by the Deputy General Manager of the IOC at wherein it was alleged that as per discussion with Sri V. Ahuja with the petitioner No. 2 the petitioners were to submit the 2nd September, 1963 details in the form of certified statements regarding (a) used transformer oil purchased, (b) processed, (c) transformer oil manufactured from used transformer oil and (d) sold during February, 1982 to June, 1982 but as not statement was received the IOC was unable to release the further quantity of TOFS to the petitioner. The copy of the said letter was also forwarded to the Director of Industries, Government of Assam, with a note that during inspection by V. Ahuja it had been observed that the petitioner firm was alleged to have been mixing used transformer oil into fresh TOFS and procession it together. By letter dated 27th September, 1983 the petitioners explained, that according to them was real position regarding manufacture of transformer oil from used transformer oil. It was also stated therein that the petitioner had not violated any of the conditions laid by the IOC as regards the supply of TOFS. Thereafter, by a letter dated 3rd October, 1983, the Divisional Manager, asked the petitioner No. 1 to supply certain information specified in the said letter in connection with the use of TOFS in the petitioner's, plaint. Thereafter, by a letter dated 3rd October, 1983, the Divisional Manager, asked the petitioner No. 1 to supply certain information specified in the said letter in connection with the use of TOFS in the petitioner's, plaint. The said information was supplied at the time of discussion held in the office of the said V. Ahuja. 20. It is alleged that suddenly from the last week of December, 1983 the IOC suspended supplying of TOFS to petitioner and as such the plaint of the petitioners has stopped working and the workers have been remaining idle. The petitioner thereafter by various letter between 23rd March, 1984 and 2nd April, 1984 requested the respondents to release the TOFS to enable the petitioner to operate the plaint but it was not released to the petitioner. The petitioners have challenged in this Writ application the said action of the respondents in not supplying the TOFS to the petitioners. It has been contended that the said action of the respondents is arbitrary and whimsical and also violative of the principles of natural justice. An affidavit affirmed by one Himadri Kanta Lahiri on 9th May, 1984 has been filed on behalf of the IOC. In the said affidavit it has been stated by the deponent that all the statements made in the said Affidavit are based on record. In the said affidavit it has been alleged, inter alia, as follows :- a) Complaints were received against the petitioner No. 1 regarding certain malpractices indulged in by the petitioner No. 1 with regard to the TOFS supplied by the IOC. The matter was thereafter investigated by the IOC. b) A preliminary investigation took place in or about September, 1983 as a result of which it was considered that a further and more detailed investigation was necessary. Accordingly, the Senior vigilance officer of the IOC investigated into the matter and found that the petitioner No. 1 had violated the terms and conditions of supplies as well as indulged in various malpractices, alleged to have carried TOFS passed the checkpost on 8th May, 1983 at 08.02 hours carrying terrycot stocks. This was entered at serial No. 110 of the concerned Checkpost Register at Bagdogra. This was entered at serial No. 110 of the concerned Checkpost Register at Bagdogra. It appeared that the petitioner No. 1 was selling TOFS ostensibly lifted for proceeding at the Gauhati market in the Calcutta market but they were enjoying the basic duty concession on the basis of L. 6 licence issued by the Excise authorities. The petitioner No. 1 exposed the IOC and in any event tried to implicate the respondent Corporation in Excise scandal. It is also alleged that the senior Vigilance Officer made available his findings towards the end of November, 1983. In the meantime after 30th September, 1983, the petitioner No. 1 suddenly stopped lifting TOFS. It is alleged that in view of the acts and activities of the petitioner No. 1 and in view of the extreme seriousness of the matter, the IOC decided to suspend supplies to the petitioner No. l. With effect from 13th December, 1983 and all supplies were stopped. 21. At the hearing before me, Mr. S. Pal, learned Counsel appearing for the respondents has tried to justify the action taken by the respondent. After all it is a contractual right of the petitioners and the IOC is not bound to supply the TOFS to the petitioners when the terms and conditions have admittedly been violated. It is the right of the IOC to choose its customers. He has further submitted that the petitioners have indisputably no right to come under Article 226 of the Constitution and this writ application is entirely misconceived. It is his contention that the petitioners have no right, for loss any fundamental right to get any supply of TOFS from the IOC and in any event having regard to the fact that the petitioners have committed breach of the terms and conditions of supplies and/or have indulged in malpractices and have therefore forfeited their eligibility, if any, for any supplies. He has also drawn my attention to the statements made in the affidavit-in-opposition in support of his contention that the IOC has the right to suspend the supplies having regard to the facts and circumstances of the case. 22. Mr. Pranab Kumar Pal, learned Counsel appearing for the petitioner has submitted that thereto is a binding contract of supply of TOFS and the stoppage without serving any notice is wholly arbitrary and violative of the principles of natural justice. 22. Mr. Pranab Kumar Pal, learned Counsel appearing for the petitioner has submitted that thereto is a binding contract of supply of TOFS and the stoppage without serving any notice is wholly arbitrary and violative of the principles of natural justice. He has further submitted that the Corporation cannot act arbitrarily by reason whereof right to carryon the business by the petitioners has been jeopardised. H is also his contention that the respondents are carrying on monopoly business and, therefore, they cannot deny the supply of TOFS to the petitioners and it is violative of Article 19(1)(g) of the Constitution. He has also submitted that the action of the respondents in any event without assigning any reason is in gross violation of the principles of natural justice, and therefore, this should be struck down. 23. Mr. P.K. Pal has also submitted that no reliance should be placed on the affidavit of the respondent, inasmuch as the order of complete suspension of the supplies is not a speaking order. No opportunity was given before such order, was passed prejudicial to the interests of the petitioner. Furthermore, any order which wants to affect the right of any citizen must be communicated to his which has not been done in the instant case. The court, has, therefore, to find out on the basis of the order which is impugned here in these proceedings whether this order is justified or not. 24. He has also submitted that even no the merits, the respondents have no legs to stand. There is no substance in the affidavit filed by the respondents. He has drawn my attention to the statements made in affidavit-in-reply refuting each and all of the purported grounds made in the affidavit of IOC for cancellation of the contract of supply. 25. I have considered the rival submissions. Certain papers stated to be the records takes out of the file have been produced before me and it has been stated that apart from these papers there are no other records. 26. The main contention of Mr. P.K. Pal, learned Counsel appearing for the petitioners is that there has been a binding contract for supply of TOFS. This contract is evidence by the correspondence passed by and between the petitioners and the IOC and the course of dealings by and between the parties. Accordingly the petitioners are entitled to benefit of that contract. P.K. Pal, learned Counsel appearing for the petitioners is that there has been a binding contract for supply of TOFS. This contract is evidence by the correspondence passed by and between the petitioners and the IOC and the course of dealings by and between the parties. Accordingly the petitioners are entitled to benefit of that contract. Whether there is an binding contract or not is immaterial for the purpose of deciding the issue raised in this proceeding. It is not in dispute that the Indian Oil Corporation has the monopoly with regard to the Base Stock (known as TOFS) for the production of transformer oil. The Indian Oil Corporation is an instrumental it of the Government and accordingly it is imperative that they should not discriminate in the raw material of the production of transformer oil to the customers. A contract cannot give a preference to a customer nor the absence of a contract can deprive a customer to get the raw material from the Indian Oil Corporation Ltd. It may be that in distributing the TOFS, a policy of equitably distribution can be envolved by the Indian Oil Corporation so that no customer is prejudiced and each can get according to their capacity for utilisation or the actual utilisation made during a particular period. But the Indian Oil Corporation cannot deny transformer oil to any customer unless it can be shown that the raw material has been used for a purpose other than the purpose for which it was taken by the customer and there has been any clandestine dealings such oil. 27. Even assuming there is a contract between the petitioners and the Indian Oil Corporation it is now well-settled that in the matter of contract also a Government authority which an instrumentally of the Government cannot act arbitrarily. This position is well-settled. 28. In the case of (I) Ramana Dayaram Shetti v. International Airport Authority and Others reported in AIR 1979 Supreme Court 1628 observed thus :- "We agree with the observations of Mathew J. in (2) V. Puman Thomas v. State of Kerala, AIR 1969 Kerala 81 (FB) that "The Government, is not and should not be as free as an individual in selecting the recipients for its largess. Whether its activity, the Government in still the Government and will be subject to restraints, inherent in its position in a democratic society. Whether its activity, the Government in still the Government and will be subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal". The same point was made by this Court in (3) Erusian Equipment and Chemicals Ltd. v. State of West Bengal, (1975) 2 SCR 674 : AIR 1975 SC 266 where the question was whether black-listing of a person without giving him an opportunity to be heard was bad? Ray, C.J. speaking on behalf of himself and his colleges on the bench pointed out that black listing of a person not only affects his reputation which is in Poundian terms and interest both of personality and substance, but also denies him equality in the matter of entering into contract with the Government and it cannot therefore, be supported without fair hearing. It was argued for the Government that no person has a right to enter into contractual relationship with the Government and the Government, like any other private individual, has the absolute right to enter into contract with anyone it pleases. But the Court, speaking through the learned Chief Justice, respondent that the Government is not like a private individual who can pick and choose the person with whom it will deal, but the Government is still a Government when it enters into contract or when it is administering larges arbitrarily. The learned Chief Justice said that then the Government is trading with the public, the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions... ... ... ...The activities of the Government have a public element and therefore there should be fairness and equality. The State need not enter into any contract will anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure." This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. The State need not enter into any contract will anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure." This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess the Government cannot act arbitrarily at its sweet will and like a private individual deal with any person it pleases but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contract quotas, licences etc. must be confined and structed by rational relevant and non discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was nor arbitrary, but was based on some valid principle which is itself was not irrational, unreasonable or discriminatory." 29. In a recent decision of this Court in the case of (4) S.P. Das and Others v. State of West Bengal and Others reported in 1980(2) CWN 480 T.K. Basu, J. referring to the said decision of the Supreme Court observed as follows :- "This decision which, in my view, has been rightly described as landmark in the evolution of Constitutional law by the Supreme Court of India, breaks a fundamentally new ground in this filed by obliterating the distinction between the Government acting in exercise of its statutory power and the ever-expanding filed of Government action in awarding contracts and licences. This Judgment contains the articles of faith both under the Constitutional gurantee of Article 14 and also as a rule of administrative law that Government in either of these fields cannot act arbitrarily or at its sweet will. The Government cannot, to recapitulate the famous doctrine enunciated in the American Chinese Laundry case act with unequal hand and an evil eye. The Government cannot, to recapitulate the famous doctrine enunciated in the American Chinese Laundry case act with unequal hand and an evil eye. This, in my view, is the basis principle enunciated in the above case." T. K. Basu, J. further held. "It seems to me that after the judgment of Bhagwati, J. it is a matter of total indifference whether the right of a party flows from a Statute or under a contract. As elaborately pointed out by Bhagwati, J. the distribution of what His Lordship called Government larges, whether it takes the form to a Statutory action or an administrative action or a contractual action, the intendict as to arbitrariness operates in full force and vigour." 30. It has also been contended that the respondents are bound by promissory estoppel. The case made out it that since the IOC assured the supply of 10 K.L. of TOFS and started supplying such quantity on ad hoc basis the petitioners stated production of transformer oil at the factory at Gauhati and have set up a factory with all modern machinery and equipment worth about Rs. 10 lakhs with a daily production capacity of 5 tonnes of transformer oil. Consequently petitioners employed required number of labourers and office staff and huge expenditure is incurred for the purpose of paying the labour, salary and wages. How the petitioners knew that the supply would be stopped or no regular supply would be made in that event the petitioners would not have gone for the production of the transformer oil by making such huge investment. In a letter dated 24th July, 1978, the Director of Industries, Assam, intimated the Indian Oil Corporation that the petitioners have placed order for complete plant and machinery for manufacture of transformer oil and the installation of the machinery was in progress and accordingly the respondents were requested to arrange for the allotment of 100 tonnes of transformer oil per month until the plant and machinery was fully erected. It was also made clear therein if delay was made in allotment, the plant and equipment would lie idle. It is only thereafter that TOFS was released to the petitioners on ad hoc basis and subsequently almost on regular basis from month to month. It is therefore contended that the respondents are estopped from denying the supply of the transformer oil to the petitioners. It is only thereafter that TOFS was released to the petitioners on ad hoc basis and subsequently almost on regular basis from month to month. It is therefore contended that the respondents are estopped from denying the supply of the transformer oil to the petitioners. It may be that the IOC had been supplying TOFS but as indicated earlier, such supply would depend on the fulfilment of the terms and conditions. So long as the terms and conditions of supply are complied with IOC cannot withhold supply. But no one has any right to get the supply for clandestine dealing and if there is such a finding in that event IOC be justified in not supplying the transformer raw material to that particular customer. When the raw material is limited, in the every nature of things there should be some restriction or some regulation in the distribution. There cannot be absolute right to get the raw materials. Therefore, the main question is whether the petitioners in this case violated any terms and conditions of the supply and thereby have forfeited their right to get the regular supply of the material. If it is held that there was no material for taking such an action against the petitioners, in that event, the stopping of supply to the petitioner would be in violation of the Constitutional guarantee provided under Article 19(1)(g). Since the respondents are carrying on monopoly business, they cannot deny the supply to one particular consumer without there being any valid and just ground therefore. 31. On other aspect is required to be mentioned. It was known to the respondents that the petitioners were running a plant for production of transformer oil until the supply was suspended. The petitioners were being supplied TOFS, the raw material. The supply was suspended all on a sudden without giving any notice to the petitioner. This is my view is highly improper as it is violative of the principles of natural justice. The respondents should have given reasonable notice to the petitioners before the supply was suspended because chain reactions followed consequent upon suspension of supply of TOFS. Firstly, the petitioner failed to fulfil the Commitments which they had already undertaken for the supply of transformer oil to the defence organisation and other Government organisations. The respondents should have given reasonable notice to the petitioners before the supply was suspended because chain reactions followed consequent upon suspension of supply of TOFS. Firstly, the petitioner failed to fulfil the Commitments which they had already undertaken for the supply of transformer oil to the defence organisation and other Government organisations. Secondly, by reason of the suspension of supply the whole plant came to a stand still and the employees were kept idle. It is not the case that in the factory or the plant, apart from the transformer oil, some other products could be manufactured so that the suspension of the raw-material for the manufacture of transformer oil would not in any prejudice the petitioners. There is, therefore, much substance in the contention of Mr. P.K. Pal, Learned Advocate, for the petitioners that in this case there has been gross violation of the principles of natural justice. He is also right in his submission that from the manner in which suspension was done, the mala fide cannot be ruled out. I would also like to dispose of a few other contentions raised, by the petitioners. The order which has been passed is not a specking order nor any order had been communicated to the petitioner. It is now well-settled that when an order which affects as person adversely the authorities concerned must give the reasons therefore. In the case of (5) M/s. Travancore Rayons Limited. v. Union of India & Ors. reported in AIR 1971 SC 862 the order of the Central Government rejecting a revision under section 36 of the Central Excise and Salt Act, 1944 merely stating that the Government having carefully considered the points made by the applicant saw no reason to interfere with the order, was challenged. The Supreme Court held that the order being Laconic is vitiated and should be set aside. The Supreme Court also held that the reasons should be disclosed in support of the order on two grounds, one that the party aggrieved in a proceeding has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous, and the other that the obligation to record a reason operates as a deterrent against possible arbitrary action against the executive authority. In the case of (6) Khudiram Das v. State of West Bengal & Ors. In the case of (6) Khudiram Das v. State of West Bengal & Ors. reported in AIR 1975 SC 550 , the Supreme Court held that in a Government under law, there can be no such thing as unreviewable discretion and this is much more so in a case where personal liberty is involved. That is why the Courts have devised various methods of judicial control so that the power in the office of an individual officer or authority is not misused or abused or exercised arbitrarily or without any justifiable grounds. In other words, the respondents cannot proceed on subjective satisfaction. No opportunity was given to the petitioner to explain the truth or otherwise of the allegations which are made now in the affidavit-in-opposition tiled on behalf of the respondents. When the action of an authority is visited with penal consequences it is imperative that the person being affected by such order should get an opportunity of explaining the reasons which led to the passing of such an adverse order affecting fundamental right of person to carryon business and profession. 32. Another grievance of the petitioner has also substance. No formal order was ever served upon the petitioner terminating the contract or suspending the supply for ever. It is now well-settled that where an order seeks to adversely affect a person, such order unless communicated to him is not operative. It is not binding at all (7) C.I.T. v. Mahabir Prasad Poddar, 93 ITR 215. 33 It is also contended by Mr. Pal on the strength of the judgment of the Supreme Court in the case of (8) Mohinder Singh Gill & Anr. v. Chief Election Commissioner reported in AIR 1978 SC 851 where the Supreme Court held that "when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. v. Chief Election Commissioner reported in AIR 1978 SC 851 where the Supreme Court held that "when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise an order bad in the beginning may by the time it comes to the Court on account of a challenge get validated by additional grounds later brought out." He therefore contends that since no reasons have been given in the order allegedly passed by the respondents and not communicated to the petitioners, the respondents cannot now rely on the affidavit filed giving the grounds on which they have purported to base their decision to suspend the supplies or to terminate the contract of the petitioners. It is true that where the grounds have been given in the order in support of the order passed, no additional grounds can be given. In this case, however, since there was no ground disclosed at all and in the affidavit the grounds are disclosed, it cannot be said that the respondents have given additional grounds in support of their action. Whatever grounds or reasons have been given in the affidavit are also the grounds found from the records. It is, therefore, necessary to find out whether on a consideration of the facts and circumstances of this case the grounds which have been put forward for the purpose of justifying the action against the petitioners are sustainable in law or not. 34. As a matter of fact, the respondents have given mainly three grounds for taking action against the petitioners. Before I deal with the grounds it is necessary to set out a few facts appearing from the records produced before me. An anonymous complaint was made to the Ministry of Petroleum against the petitioners saving that the petitioners had been granted L-6 Licence for manufacturing transformer oil and the unit of the petitioners is enjoying Excise concession on the their raw material, but the raw-materials lifted by the petitioners on different dates during 3rd February, 1982 to 11th May, 1983 instead of coming to the factory at Gauhati was sold out in the black market in Calcutta. The afores1id complaint was sent by the Ministry of Shri J. Prabhudas, the Officer on Special Duty, Petroleum Intelligence, Vigilance Wing, OCC, and wain turn forwarded by Prabhudas to the General Manager, Eastern Region, Marketing Division, Calcutta, for enquiry and report. The said complaint was received by the Chief Senior Vigilance Officer on 1st August, 1983. The said Vigilance Officer discussed the facts and arrived at his conclusion as follows :- "In the original complaint against M/s. Bharat Industrial Corporation, the copy of which is attached to the report as Annexure 'A', the following four points were for verification :- 1. The Unit has been granted L-6 Licence for manufacturing Transformer Oil and the said unit is enjoying Excise concession on the raw material but it will be observed that the following truck-loads (the details mentioned in the complaint and given in Annexure 'A') were uplifted and sold in the Calcutta market. 2. It takes minimum 6 days for a truck to go to Gauhati and return to Calcutta. So how could the same to be placed for Indian Oil, IPC or BPC for uplifting the products within such short periods. It, therefore, clearly indicated that the product was sold out in the Calcutta Market inspite of enjoying benefit of Excise concession. 3. While sending products to Gauhati a permit was needed for transporting the same. The party may be asked to submit all the permit to support their bona fide claim as to their proper use of TOFS. This party has another unit in the name of National Oil Company, Calcutta, which is a big supplier of DGS&D and Defenced factories. This is being used in' the National Oil Company and instead some inferior oil is being supplied to Gauhati for manufacturing sub-standard Transformer Oil." 35. Regarding Point No. 1 it has been verified that the unit in question i.e., M/s Bharat Industrial Corporation has been granted L-6 Licence for manufacturing Transformer Oil. It is also a fact that the Excise concession to the tune of Rs. 1100/- per K.L. is being enjoyed by the party being a small scale industry. It has also been found from the challans of the party that the details of the truck loads of TOFS lifted by them as given in the complaint is a true statement of facts and the quantity, the date of upliftment, the lorry/IT. 1100/- per K.L. is being enjoyed by the party being a small scale industry. It has also been found from the challans of the party that the details of the truck loads of TOFS lifted by them as given in the complaint is a true statement of facts and the quantity, the date of upliftment, the lorry/IT. No. are almost the same as given in the original complainant. 36. Regarding the last point that the product were sold out in the Calcutta market, no direct evidence has been available so far to substantiate the allegation. However, there are reasons to believe that the TOFS lifted by the party from out Paharput unit were not sent to Gauhati because of the following reasons :- "(a) The party has not able to show records to our satisfaction to establish that the transporter engaged by them and carried to TOFS to their factory at Gauhati. The party also could not show the valid national permit which is required for interested movement of the lorries. (b) They have been giving different statement at different times which are self-contradictory. (c) Some of the lorry numbers furnished by them which according to them had carried the products in barrels from Calcutta to Gauhati were found not to have passed through the check-post at Bagdogra. (d) In one case as discussed above a lorry which is supposed to have carried TOFS was found carrying Terrycot shocks as per the record of the check-post at Bagdogra." The Senior Vigilance Officer made the following recommendation. "Under the above circumstances as detailed above it is recommended that the supplies of TOFS to the party be suspended forthwith after issuing show-cause notice to them as they have furnished deliberate false information and returns and have issued contradictory statements at different times. 1. For transshipping the TOFS lifted by them in TT's the number of which was provided in their consignment note, to a different lorry without disclosing the fact to IOC or to Excise. 2. For unauthorised disposing off the TOFS. 3. The Excise people are supposed to have checked the correctness of their entries in the stock-book as advance information were required to be sent to them before TOPS were despatched from Calcutta to Gauhati. This shows malpractice by the party has been done in connivance with the Excise Officials. 2. For unauthorised disposing off the TOFS. 3. The Excise people are supposed to have checked the correctness of their entries in the stock-book as advance information were required to be sent to them before TOPS were despatched from Calcutta to Gauhati. This shows malpractice by the party has been done in connivance with the Excise Officials. It is therefore recommended that in order to have a through probe into the whole matter the case may be handed over to C.B.I." 37. The report of the Senior Vigilance Officer was forwarded to J. Prabhudas, Officer on Special Duty by the General Manager. The letter is in the following terms :- "Sub: Complaint against M/s. Bharat Industrial Corporation, Gauhati-Manufacturers of Transformer Oil. Kindly refer to your letter No. PIVC/RR dt. 8.10.83 on the above subject. Further to our letter of event No. dt. 12.9.83. I enclose herewith the Final Report relating to the above mentioned complaint received from our Sr. Vigilance Officer. You are requested to kindly consult G.M. (Lubes) on the above subject and advise us, in due course, the action to be taken by us in this regard." 38. It is surprising that before any order came from the authorities concerned, the supply was stopped by the respondent. It may be also mentioned that the copy of the anonymous petition has not been placed before me. The records which have been made out in the affidavit have been dealt with by the petitioners in their replies. After receipt of the Officer on Special Duty sent the said report to the Ministry of Energy, Department of Petroleum and copy of that letter was sent to Regional Co-ordinator and General Manager, Indian Oil Corporation. The following endorsement is made on the said letter, copy whereof was sent to the Regional Co-ordinator and General Manager : "Please refer to your letter No. VO/210/C-11/83 dated November 21, 1983, forwarding the Chief Vigilance Officer's report. It is suggested that: (a) Supplies of TOFS should be suspended to Bharat Industrial Corporation, Gauhati as suggested by Sr. Vigilance Officer, I agree with the recommendations given. (b) A copy of the report received from the Sr. Vigilance Officer, IOC is being sent to the Director of Industries Government of Assam with a request that the matter may be investigated by them. I am also referring this matter to the Joint Director, SBI and Economics Office Wing, Delhi. Vigilance Officer, I agree with the recommendations given. (b) A copy of the report received from the Sr. Vigilance Officer, IOC is being sent to the Director of Industries Government of Assam with a request that the matter may be investigated by them. I am also referring this matter to the Joint Director, SBI and Economics Office Wing, Delhi. The report of the SVO is a very comprehensive report bringing out many of the malpracticed and irregularities committed by this party. As such it is our duty not to allow such a unit to manufacture Transformer Oil especially when this party is supplying large quantities to the Defence and Government establishments. Opportunity is also being taken during my next visit to caution DGS & D and Defence Establishments. It case if you fell that we should meet and discuss the subject further, I would do so." 39. I shall now deal with the allegations made against the petitioner regarding the violations of the terms and conditions of the agreement of sale. The investigation was started against the petitioner on the basis of the anonymous complaints. The nature of the complaint was not disclosed to the petitioner at any stage of the proceeding. It is only in the affidavit-in-opposition certain disclosures had been made and these allegations have been deal with by the petitioner in the affidavit filed in reply to the affidavit of the respondents. One of the grounds made out by the respondents is that substantial quantities of TOFS were not at all transported to the Gauhati factory of the petitioner No. 1. For example check-post record relating to Lorry No. WMK-7305 which alleged to have carried TOFS passed the check-post on 8th May, 1983 at 08-02 hrs. carrying Terrycot shocks. This was entered at SI. No. 110 of the concerned check-post Register at Bigdogra. 40. The explanation of the petitioner as made out in paragraphs 12 of the affidavit-in-opposition is that in course of the investigation made by the Senior Vigilance Officer of the Respondent Corpn. or the Officers of the Central Board of Investigation, no allegation was made by the said officers and no explanation was asked for. Since an investigation was made on an anonymous complaint, it was the duty of the investigating officers as also the C.B.I. to confront the petitioners with the allegations that were made against the petitioners. or the Officers of the Central Board of Investigation, no allegation was made by the said officers and no explanation was asked for. Since an investigation was made on an anonymous complaint, it was the duty of the investigating officers as also the C.B.I. to confront the petitioners with the allegations that were made against the petitioners. Had the investigating officers disclosed the nature of the allegations, the petitioners could have offered the explanation. If, after the explanation was considered, the respondents had come to any conclusion, something could have been said. It is strange that at no point of limo, the petitioners were asked to offer any explanation. On the contrary from time to time, as would appear from the statements made in the petition which have not been denied, the petitioner was asked to produce certain records or to reconcile certain statements. When the authorities rely on certain investigation made behind the back of the petitioners and which have far reaching consequences of depriving the petitioners of their right to carryon business, the respondents should have disclosed such materials to the petitioners. 41. The explanation of the petitioner is that the entire allegation was based on certain alleged entry alleged to have been made by certain unknown persons at the Bagdogra Check Post Registrar, copy of which also was never supplied to them and they were also never given any opportunity to rebut or explain the same. The goods which are carried from Calcutta to Gauhati had to pass through three check-posts namely Bagdogra Check Post, Dharma (Serampur) Check Post and lastly Gauhati Check Post. Neither Bagdogra Check-post nor Gauhati Check-post has any importance inasmuch as no question of payment of any tariff or tax arises. The only important check-post duty is Serampur Check Post where the question regarding payment of inter states Sales Tax arises. As a matter of fact the particular lorry namely WMK 7305 which was carrying the goods belonging to the petitioner No. 1, was also carrying goods of three other concerns. The nature and weights of goods which the said particular lorry carried on TOFS 10, 140 Kgs. T.C. packing paper weighing about 756 Kgs., Sodium Salt weighing about 120 Kgs. and Dekofol weighing about 110 Kgs. aggregating to 11.26 Kgs. The nature and weights of goods which the said particular lorry carried on TOFS 10, 140 Kgs. T.C. packing paper weighing about 756 Kgs., Sodium Salt weighing about 120 Kgs. and Dekofol weighing about 110 Kgs. aggregating to 11.26 Kgs. The said lorry left Calcutta on 5th May, 1983 and reached Gauhati and delivered the goods to the petitioner No. 1 at their factory at Gauhati on the night of 9th May, 1983. No other goods appear to have been carried by the said particular truck during this voyage as will appear from the lorry challan-cum-manifest a copy whereof was handed over by the Driver of the Lorry concerned to the representative of the petitioner No. 1 a Gauhati, Assam. The said TOFS weighing about 10, 41 Kgs. which was received by the factory of the petitioner No. 1 at Gauhati on the night of 9th May, 1983, were duly entered in other relevant contemporaneous documents and books of accounts which are required to be maintained by the petitioner No. 1 for the purposes of claiming concessional rate of excise duty. It will appear from the facts as stated hereinafter that the said goods were utilised for the manufacture from time to time and the same were checked by the Central Excise Authorities at Gauhati. It is really absured to suggest that a truck which can carry a load of 11,126 Kgs. or even more was carrying "Terrycot Shocks" and nothing else. The alleged "Terrycot Shocks" weighing 11,126 Kgs. can hardly have any market entire in Assam far less in Gauhati alone. Although the respondents have described that solitary instance of certain alleged entry in the alleged register of Bagdogra Check Post no other instance has been given either in the said affidavit or at the time of investigation made either by the Senior Vigilance Officer of the Indian Oil Corporation or by Officers of Central Bureau of Investigations. The said allegations go to show the malafide, arbitrary and capricious way the respondents have proceeded in stopping the supply of TOFS to the petitioner No. l. The Lorry challan-cum-manifest dated 9th May, 1983, from the carrier, showing the despatch of TOFS has also been annexed. It is also significant that the alleged report of C.B.I has not been placed before this Court. 42. It is also significant that the alleged report of C.B.I has not been placed before this Court. 42. The next allegation is that the petitioner No. 1 was manufacturing transformer oil by mixing used transformer oil with transfer oil processed from TOFS supplied by the respondent Corporation. It has been alleged that in the monthly statement for December, 1982, the petitioner No. 1 has shown 17.550 K.L. sold to Ordnance Factory Kanpur, whereas the relevant bill dated 3rd December, 1982 raised with the said Ordnance Factory was for supply of 29.260 K.L. The petitioner admitted in course of the investigation that out of the said quantity of 29.260 K.L., 17.556 K.L. had been processed from TOFS and the remaining quantity represented used transformer oil. This again, the petitioner were not entitled to do. 43. The petitioner have denied that they had been manufacturing transformer oil by mixing used transformer oil with transformer oil processed from TOFS supplied by the respondent Corporation. The investigation officers perhaps did not appreciate the process of manufacturing transformer oil. As a matter of fact, the transformer oil could be manufactured from TOFS as so by reclaiming used transformer oil as entirely different as will appear from the synopsis of reclamation of transformer oil published by the Central Fuel Research Institute, Bangalore. The petitioners have disclosed the actual state of affairs. The petitioners manufactured transformer oil both from TOFS supplied by the respondent Corporation as well as used transformer oil purchased for the Government authority namely Electricity Board. They maintain separate sets of books for manufacture of 2 kinds of transformer oil. All transformer oil manufactured by the petitioners are said to be in accordance with the I.S.I. specification. The petitioners have explained that as per the requirements of the Ordnance factory, the petitioner No. 1 supplied 29,260 K.L. of transformer oil. It is within the knowledge of the Ordnance Factory that the said A is partly manufactured from TOFS and partly from use transformer oil, transformer oil and they are strictly of I.S.I. specification. As a matter of fact in making the said purchase, the Ordinance Factory, Kanpur, followed the same procedure which is followed by all Government authorities in purchasing transformer oil. As a matter of fact in making the said purchase, the Ordinance Factory, Kanpur, followed the same procedure which is followed by all Government authorities in purchasing transformer oil. The Inspector from the Department of Supply, Government of India nominated by the Ordnance Factory came to the factory of the petitioner No. 1 on 12th June, 1982, drew a number of samples from the lot which they were going to purchase, had them sealed with his markings and tested and after being fully satisfied that the said TOFS are of I.S.I. Specifications, released the said sealed drums for sending them to the Ordnance Factory. The petitioners have also relied the order dated 8th April, 1982 of the Ordnance Factory together with the inspection certificate of the said Inspector. It is significant that the respondents have not disclosed that any complaint was made by the purchasers of transformer oils manufactured by the petitioner No. 1 or for that matter from Ordnance Factory, Kanpur. It has net been denied that the Electricity Boards all over India use reclaimed transformer oil and for that purpose the Electricity Boards call tenders from time to time. Petitioners have also relied on one of such tenders issued by Bihar State Electricity Board, Patna. It is difficult for me to accept the contention of the respondent that under the terms and conditions of the contract of supply the petitioner cannot manufacture transformer oil out of used transformer oil. It has not been disputed that till manufacturers of transformer oil purchase used transformer oil and reclaim the same in transformer oil upto I.S.I. specification for further use in the Government. The Government of India encourages the said process of manufacture of transformer oil. It is also significant that not complaint has been made by any customer of the petitioner No. 1 about quality and specification of the product. As indicated earlier, even the anonymous complaint has not also been disclosed but the investigation way made without confronting the petitioners with the materials gathered before or after such investigation. In view of the growing need for Transformer Oil and also in view of shortage of TOFS for manufacturing Transformer Oil research works have been going on for a long time by Central Power Research Institute, Bangalore, A Government of India undertaking. The said Central Power Research Institute is the highest authority on the subject in India. In view of the growing need for Transformer Oil and also in view of shortage of TOFS for manufacturing Transformer Oil research works have been going on for a long time by Central Power Research Institute, Bangalore, A Government of India undertaking. The said Central Power Research Institute is the highest authority on the subject in India. The said Central Power Research Institute found on researches that used transformer oil if reclaimed can be restored to its original form with all its original characteristics by applying certain synthetic ingredients and/or materials and/or chemicals. There is virtually no difference in quality or in standard between the two transformer oils one manufactured out of TOFS and the other one reclaimed from used transformer oil. It is not denied that it is common practice by his consumers of transformer oil like State Electricity Boards and other concerns to have their used transformer oil reclaimed and to use the same again after reclamation. This allegation thereform cannot form the basis for withholding the supply of TOFS to the petitioners. If the complaints of the respondents were well-founded, then the customers of the petitioners must have made complaints to the respondent Corporation also. IOC could have verified from the customers of the petitioners about the Quality. The transformer oil manufactured by the petitioners were consumed by the Ministry of Defence, Ministry of Railway, Indian Navy, Ordnance Factory and Coalmines Authorities and different state Electricity Boards as well as Calcutta Electricity Supply Corporation. No complaint was received from any of the said purchasers regarding the quantity of the transformer oil manufactured by the petitioners either from TOFS or from used transformer oil. 44. All the purchasers of the transformer oil before purchasing any transformer oil sent their inspectors to take the samples of the transformer oil which they intended to purchase from that particular lot and sealed the drums from which samples were drawn and had them tested and it is only after being satisfied that it conforms to the specifications, the sealed drums are sent to the purchasers. The same procedure was followed by the petitioners in respect of the transformer oil manufactured by the petitioner No. 1 from TOFS, as also transformer oil manufactured by the petitioner No. 1 from used transformer oil after reclaimation. This aspect of the matter was overlooked by the IOC in making the said allegations against the petitioners. 45. The same procedure was followed by the petitioners in respect of the transformer oil manufactured by the petitioner No. 1 from TOFS, as also transformer oil manufactured by the petitioner No. 1 from used transformer oil after reclaimation. This aspect of the matter was overlooked by the IOC in making the said allegations against the petitioners. 45. The next allegation against the petitioners is that the petitioner No.1 was selling TOFS estensibly lifted for processing at the Gauhati factory in the Calcutta market but was enjoying the benefit of excise duty concession on the basis of L. 6 Licence issued by the Central Excises authorities. The petitioner No. 1 accordingly exposed the Corporation or in any event tried to implicate the Corporation in excise scandal. In have not been able to appreciate the allegations which have been made here. TOFS satisfying the conditions laid down in Notification No. 28/62-C.E. dated 24th April, 1962 and used in the manufacture of transformer oil is eligible for assessment at concessional rate under the said Notification. However, when TOFS falling under item 8 of the Central Excise Tariff. Inasmuch as the petitioner No.1 was purchasing transformer oil from Indian Oil Corporation for the purpose of manufacturing transformer oil the petitioner No.1 became entitled to the said concessional rate under the aforesaid notification. For the purposes of enjoying the said concessional rate the petitioner No. 1 had to take L. 6 licence and had to maintain records as per the Central Excise Rules, 1944. One of the requirements of the said Central Excise Rules is to keep records in R. G. 16 wherein the opening stock has to be shown, date and quantity of receipt of fresh stock have to be shown, the date and quantity of TOFS issued for manufacture have to be shown as also the date and quantity manufactured and the closing balance. It may be mentioned here that the said registers (R.G. 16) were certified first by the Central Excise Authorities and thereafter they were being checked periodically by the Inspector of Central Excise Authorities at Gauhati. The same particulars also are to be furnished in Form No. IV which were also being checked by the officers of the Central Excise Authorities. It may be mentioned here that the said registers (R.G. 16) were certified first by the Central Excise Authorities and thereafter they were being checked periodically by the Inspector of Central Excise Authorities at Gauhati. The same particulars also are to be furnished in Form No. IV which were also being checked by the officers of the Central Excise Authorities. Further, under Rule 173K the petitioners have to inform the appropriate officer within 24 hours of the receipt of the goods in Form No. D. 3 and the Central Excise Authorities are to check them within 48 hours as required by the said Rules. No complaint has been received from or made by the Central Excise Authorities that any of the TOFS purchased by the petitioner No.1 from the Indian Oil Corporation at Calcutta after paying concessional rate excise duty and transported to Gauhati factory have been sold instead of transporting them to Gauhati. The relevant registers were also produced before me. The Inspector, Central Excise visited the factory at Gauhati and checked and signed the Registers (form No. IV) maintained under Rule 173 (G) of the Central Excise Rules on diverse dates between 17th March, 1982 and 7th March, 1984. The Inspector of the Central Excise, visited the factory, Gauhati, on arrival of TOFS and checked and inspected on diverse dated the R.G. 16 registers between 25th December, 1981 and 7th January, 1984, R.G. 16 register is for excisable goods used without payment of duty. Form No. IV is in respect of account of raw materials and components. Another register which was required to be maintained and which is fact had been maintained was regarding declaration of receipt of excisable goods. This register had to be furnished to the Inspector of Central Excise. It is not known how the petitioners have been getting the benefit of concession and how the petitioners are bringing the respondent Corporation in any alleged scandal. It is significant that the Central Excise authorities did not initiate any proceeding against the petitioners for any alleged violation. Had the contention of the respondent Corporation been correct, in that event, the Central Excise authorities would have certainly taken steps against the petitioners but nothing has been done, nor anything has been alleged. It goes to show that the allegations made against the petitioners have no basis at all. 46. Had the contention of the respondent Corporation been correct, in that event, the Central Excise authorities would have certainly taken steps against the petitioners but nothing has been done, nor anything has been alleged. It goes to show that the allegations made against the petitioners have no basis at all. 46. The attitude of the respondents are far from compromising. When the matter was heard, I directed them to reconsider the question of resuming the supply to the Corporation on the basis of the fact disclosed in the affidavit-in-reply. The respondents have not asked for leave to controvert any of the statements made in the affidavit-in-reply. They have only intimated to this Court that the authorities are not inclined to resume any supply to the petitioners. It cannot be the rule that once a person had been found guilty of any violation of the terms and connections of any contract he would not be supplied the goods at all. There must be certain other reasons behind the discontinuance of the supply. No explanation is forthcoming why the officers concerned before coming to any final decision stopped the supply. Neither factually nor otherwise there is any justification for stoppage of the supply of TOFS to the petitioners. 47. Having regard to the facts and circumstances of this case I am of the view that the respondents acted arbitrarily in withholding the supply of TOFS to the petitioners. Being the monopoly supplier they cannot arbitrarily stop the supply to any particular customer. The manner in which it has been done cannot be approved. The allegations which have been made against the petitioners are based on unilateral findings of the vigilance officer. The principle of natural justice has not been followed at any stage. The materials have been gathered behind the back of the petitioners, but without giving the petitioners an opportunity of meeting those allegation or dealing with the said materials, the respondents came to their conclusion. Such a decision which affects the petitioners pre-judicially and infringes their fundamental rights to carry on business is subject to judicial review. For the reasons aforesaid the Rule is mace absolute. Let appropriate writs be issued. The respondents are directed to resume supply of TOFS to the petitioners subject to the petitioners fulfilling the conditions for such supply being made to the petitioners. For the reasons aforesaid the Rule is mace absolute. Let appropriate writs be issued. The respondents are directed to resume supply of TOFS to the petitioners subject to the petitioners fulfilling the conditions for such supply being made to the petitioners. In the event there is any complaint against the petitioners for either non utilisation or improper utilisation of the TOFS the respondents will be at liberty to make enquiry but in such enquiry the petitioners should be furnished with all the documents and material on which the respondents might rely and after hearing the petitioners, the respondents would be at liberty to take steps in accordance with law. 48. There will be no order as to costs. Let a plain copy of the judgment countersigned by an officer of this Court be handed over to the Learned Advocate for the petitioner upon the undertaking of the petitioner to apply for certified copy and to put in folios and stamps.